Global foreign direct investment ( FDI) inflows fell by about 21 percent in 2008 and will likely fall further in 2009, the United Nations Conference on Trade and Development (UNCTAD) said on Monday.
Global FDI inflows fell to an estimated 1.4 trillion U.S. dollars in 2008, mainly because of the global financial crisis and economic recession, the UN agency said in a statement, Xinhua reported.
However, the impact of the crisis varied widely depending on region and country, with consequently varying impacts on the geographic patterns of FDI flows, the statement said.
Preliminary data issued by UNCTAD indicate that FDI inflows fell by some 33 percent in developed countries as a whole in 2008, mainly as a result of the protracted and deepening problems affecting financial institutions and as a result of the liquidity crisis in the money and debt markets.
In developing and transition economies, preliminary estimates suggest that FDI inflows have been more resilient, though the worst impacts of the global economic crisis had still to be fully transmitted to these countries.
The growth rate of FDI inflows to developing countries, while lower than in 2007, should still have remained positive for 2008 at an estimated 4 percent, UNCTAD said.
In the short-term, the negative impacts of the financial and economic crises on FDI are expected to remain dominant and to contribute to a continued fall in overall FDI through 2009, according to UNCTAD estimates.
Developing countries will not be excepted -- that is, FDI falls in 2009 will be more widespread.
However, various positive factors are at work and will trigger, sooner or later, a resurgence of international investment flows, UNCTAD said.
These factors include investment opportunities based on cheap asset prices and industry restructuring, relatively large amounts of financial resources available in emerging countries and cash- rich oil-exporting countries, quick expansion of new activities such as new energy- and environment-related industries, and the relative resilience of international companies.
