In 2012, the global flows of foreign direct investment (FDI) were reduced by 18%, amounting to 1.35 trillion dollars. As the macroeconomic conditions improve, and as investors recover their medium-term confidence, FDI flows may then reach the amount of 1.6 trillion dollars in 2014, and 1.8 trillion in 2015.
Developing countries were the ones to attract the largest volume of FDI in 2012. For the first time in history, developing economies absorbed more FDI than developed countries, specifically 52% of global FDI flows. In developing regions, flows to the Asian, Latin American and the Caribbean countries remained in historically high levels, but growth decelerated. Africa experienced a year-on-year increase of FDI inflows in 2012. Outward FDI from developing economies reached 426,000 million dollars, this is, a record 31% of the world’s total. Outward FDI from developing countries in Asia, Latin America and the Caribbean remained at the same level as in 2011. Asian developing countries are the main FDI source, with three quarters of the total amount from developing countries. Among the major investors, China moved up from the sixth position to the third in 2012, just below the United States and Japan.
UNCTAD’s medium-term projections, based on macroeconomic data, still reveal an increase in FDI flows at a moderate yet regular pace, reaching 1.6 trillion dollars in 2014, and 1.8 trillion in 2015.
Other important trends were observed in 2012:
- Projects of investment on new activities, whose value had been decreasing for two years, have remained stable in 2012, at 904 billion dollars.
- FDI on the primary sector and the service sector is rising after two years of decline. The FDI rebound in the service sector, which in 2012 amounted to 570 billion dollars, is the result of the greater activity of public services (electricity, gas and water).
- All major indicators of international production reveal that the economic activity of foreign affiliates has increased in 2012. It is estimated that, during the year, foreign affiliates have provided employment to 69 million workers worldwide, who have generated 28 trillion dollars in sales, and an added value of 7 trillion dollars.
UNCTAD’s FDI attraction index, which measures the FDI (total and in relation to size) that the economies manage to attract, ranks eight developing and transition economies among the first positions, while a decade ago only four of them were placed within this top group. The new countries at the top of the list include Ireland, Mongolia, and Congo. Right below the top 10, many countries have attained a sustained escalation in the ranking, such as Peru and Ghana, which have been escalating positions for six consecutive years.