- 28 July 2021
For the first time, Vietnam entered the top 20 countries attracting the most FDI in the world
According to the recently released United Nations Conference on Trade and Development (UNCTAD) Investment Report, 2021, in global, foreign direct investment (FDI) flows are expected to bottom out in 2021 and recover a part with an increase of 10-15%.
FDI inflows from major Asian economies (e.g., China, Hong Kong, Japan, Korea) have decreased.
The report said that the COVID-19 crisis caused a sharp drop in FDI 2020. Global FDI decreases 35% to $1 trillion, from $1.5 trillion in 2019. This figure is nearly 20% lower than in 2009 after the global financial crisis.
The pandemic’s impact on global FDI is concentrated in the first half of 2020. All components of FDI decline. The overall contraction in new project activity, combined with delays in cross-border mergers and acquisitions (M&A), has resulted in equity capital outflows falling by more than 50%.
UNCTAD believes that increasing investment to support a sustainable and inclusive recovery after the pandemic is a global policy priority. This requires accelerating investment in infrastructure and energy transition, strengthening countries’ resilience, and focusing on the healthcare sector.
By geographical area, FDI decreased around the world, excluding Asia. FDI fell unevenly in developing regions, reduced 45% in Latin America and the Caribbean, and decreased 16% in Africa.
In contrast, FDI flows to Asia increased by 4%, making the region account for half of total global FDI in 2020. FDI in transition economies fell by 58%. The pandemic continues to depress FDI in structurally weak and vulnerable economies.
The US is still the world’s largest FDI recipient, followed by China, Hong Kong, Singapore, India, Luxembourg, Germany, Ireland, Mexico, Sweden, Brazil, and Israel.
In the opposite direction, China, Luxembourg, and Japan are the three largest foreign investors. The 4th to 10th positions include Hong Kong (China), the US, Canada, France, Germany, South Korea, and Singapore.