There is little doubt that these interventions have been highly succe...
2021-07-05 2 ENGLISH REPORTS
Global foreign direct investment (FDI) flows fell by 35 per cent in 2020, reaching $1 trillion, from $1.5 trillion in 2019 (figure I.1). This is the lowest level since 2005 and almost 20 per cent lower than the 2009 trough after the global financial crisis. The lockdowns around the world in response to the COVID-19 pandemic slowed down existing investment projects, and the prospects of a recession led multinational enterprises (MNEs) to re-assess new projects. The fall in FDI was significantly sharper than the fall in gross domestic product (GDP) and trade.FDI plummeted in developed and transition economies, falling by 58 per cent in both.
It decreased by a more moderate 8 per cent in developing economies, mainly because of resilient flows in Asia (up 4 per cent). As a result, developing economies accounted for two thirds of global FDI, up from just under half in 2019. Both the steep decline in developed economies and the relatively strong showing in Asia were influenced to a significant degree by large fluctuations in a small number of conduit economies. Of the global decline of some $500 billion, almost one third was accounted for by the Netherlands and caused by the liquidation of several large holding companies, corporate reconfigurations and intrafirm financial flows.largely reflecting financial transactions by Chinese MNEs. Excluding the effects of conduit flows, one-off transactions and intrafirm financial flows, the global decline was slightly more moderate (about 25 per cent) and uniform (with flows to developing Asia down 6 per cent).
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