This archive report was first published on 20 July 2021.
According to the latest United Nations World Investment Report published on July 20, 2021, global foreign direct investment (FDI) flows are projected to recover this year, after a 35% drop last year due to the COVID-19 crisis.
The report shows that foreign direct investment fell by a third to $1 trillion in 2020, compared to $1.5 trillion in 2019, with developed economies suffering the biggest decline where FDI fell by 58%.
Developing nations, however, fared relatively better, with FDI dipping by 8%. Two-thirds of the global foreign direct investment flows in 2020 went to developing countries in Africa, Asia, and South America, and only a third went to first-world countries.
Acting UNCTAD Secretary-General Isabelle Durant warned that the drop in foreign investment in SDG-related sectors may reverse the progress achieved in SDG investment in recent years, posing a risk to delivering the 2030 Agenda for Sustainable Development and to sustained post-pandemic recovery.
Despite the projected recovery, foreign investments are still expected to be below pre-pandemic levels, with current forecasts showing a further increase in 2022 which, at the upper bound of projections, could bring FDI back to the 2019 level.
Investment flows to Africa, South America, and the Caribbean are unlikely to fully recover in the near term, notes the UN report, while FDIs to Asia are expected to remain strong in 2021 as the region is an attractive investment destination for international investors.
