58818
India has become one of the largest recipients of foreign direct investment on account of reform measures taken  by the government. The picture shows Apple CEO Tim Cook (C) exits an Apple Store in India.
India has become one of the largest recipients of foreign direct investment on account of reform measures taken  by the government. The picture shows Apple CEO Tim Cook (C) exits an Apple Store in India.

Global FDI May Register 10% Growth in 2017

A weak global economy and low world trade volumes, was not equally shared across regions, reflecting the heterogeneous impact of the current economic environment

Global FDI May Register 10% Growth in 2017

According to the latest Global Investment Trends Monitor by the United Nations Conference on Trade and Development, global flows of foreign direct investment fell 13% to $1.52 trillion in 2016, but has the potential to increase to 10% in 2017.
The decline, occasioned by a weak global economy and low world trade volumes, was not equally shared across regions, reflecting the heterogeneous impact of the current economic environment on countries worldwide, UNCTAD reported Thursday.
FDI flows to Europe declined 29% to an estimated $385 million, tempered by a 6% growth of flows to North America and slight increase of investment in Australia and Japan.
Investment in developing economies fell 20% to an estimated $600 billion due to slowing economic growth and falling commodity prices. However, developing economies continue to comprise half of the top 10 host economies. Transition economies recorded a 30% increase in FDI flows to an estimated $52 billion.
Cross-border mergers and acquisitions also declined last year. The value of net sales increased by 13% to $831 billion, an insignificant growth compared to the 67% and 68% increases registered in 2014 and 2015 respectively.
Greenfield FDI project announcements value rose by 5%, but this was largely due to a handful of very large projects in a few countries. The vast majority of countries, in contrast, registered declines.
“Looking ahead, economic fundamentals point to a potential increase in FDI flows by around 10% in 2017,” UNCTAD Secretary-General Mukhisa Kituyi said.
The sharp drop-off in manufacturing investment projects is concerning as the sector is vital in improving productivity in developing economies.  And significant uncertainties about the shape of future economic policy developments could hamper FDI in the short-term, Kituyi added.
The 2017 growth forecast is based on expected economic growth and rising commodity prices, but the outlook is clouded by uncertainty over the policies of US President Donald Trump and the evolution of Britain's plan to leave the European Union.
Until the fog lifts, companies might keep plans on hold, said UNCTAD's investment chief James Zhan.
If Trump cuts taxes on repatriated profits, US firms will have an incentive to bring foreign earnings back to the United States, but that might not translate into an investment boom there, Zhan said.

China, India & Russia  
Last year China was the third largest outward investor globally, with big spending in Brazil, Germany and Spain. But after several years of "spectacular" growth, China's boom in outward FDI may slow down this year due to policies to reduce capital flight, Zhan said.
India has become one of the largest recipients of foreign direct investment on account of reform measures taken by the government, the Economic Survey for 2016-17 said early this week, PTI reported. 
"FDI reform measures were implemented, allowing India to become one of the world's largest recipients of foreign direct investment ... India's FDI has risen sharply over time," the document, which was tabled in the Indian parliament, said. 
In the most recent year, it said FDI is running at an annual rate of $75 billion, which is not far short of the amounts that China was receiving at the height of its growth boom in the mid-2000s.
Meanwhile, FDI into the Russian economy surged 62% in 2016 to $19 billion against the 13% decline globally to $1.52 trillion, the report said.
"FDI flows to transition economies rose by 38% to an estimated $52 billion. This largely reflected a doubling of inflows in Kazakhstan (from $4 billion to $8.1 billion) as well as a 62% uptick in flows to the Russian Federation (from $12 billion to an estimated $19 billion)," it said. 
The increase in FDI in Russia "is principally attributed to investments associated with the privatization of state-owned assets: the government sold a 19.5% stake in the state-owned oil company Rosneft in a deal worth around $11 billion to a consortium led by Glencore (Switzerland) and the Qatari sovereign wealth fund," the UNCTAD reported.

Short URL : https://goo.gl/puCuxD
  1. https://goo.gl/wOiphB
  • https://goo.gl/yHynFk
  • https://goo.gl/iRBFg5
  • https://goo.gl/E7VbcZ
  • https://goo.gl/3nECxi

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus