GENEVA: The global foreign direct investment (FDI) had a modest increase of over 3% to reach an estimated $1.37 trillion in 2023, defying expectations as recession fears early in the year receded, and financial markets performed well.

Global FDI flows increased, but economic uncertainty and higher interest rates affected global investment. The headline increase was mainly due to higher values in a few European conduit economies; excluding these conduits, global FDI flows were 18 percent lower, as per United Nations Conference on Trade and Development’s (UNCTAD) Global Investment Trends Monitor.

In developed countries, FDI in the European Union jumped from negative US$150 billion in 2022 to positive $141 billion because of large swings in Luxembourg and the Netherlands. Excluding those two countries, inflows to the rest of the EU were 23 percent down, with declines in several large recipients. Inflows in other developed countries also stagnated, with zero growth in North America and declines elsewhere.

FDI
flows to developing countries fell by 9 percent, to $841 billion, with declining or stagnating flows in most regions. FDI decreased by 12 percent in developing Asia and by 1 percent in Africa. It was stable in Latin America and the Caribbean as Central America bucked the trend.

Source: Emirates News Agency