18|02|2010

Worldwide investment flows fell by 39% in 2009, according the UNCTAD’s first estimates

The UNCTAD’s second “Global Investment Trends Monitor” report estimates worldwide FDI flows to have fallen by 39% in 2009 when compared with the previous year; down to a figure of 1 billion dollars.

Overall data and country-specific data are both UNCTAD estimates made by annualizing data available on the 7th of January 2010.

The fallback in FDI worldwide is mainly the result of a combination of two factors: the reduction in business profits and a redirectioning of intra-group loans back towards parent companies. As a consequence, the figure for merger and take-over operations has gone down by 66%.

In contrast to 2008 and trends over the last six years, the fall in FDI has affected developed economies and emerging economies alike. Foreign investment flows to developed countries fell by 41% (-29.2% in 2008 compared with 2007) and to emerging countries by 35% (+17% in 2008 compared with 2007) in 2009.

As for the country-specific evolution, China (continental China + HK) came very close to overhauling the US as the foremost destination for FDI worldwide (both countries had figures of nearly 136,000 million dollars). Specifically, flows went down by 57% in the United States as opposed to a fall of 2.6% in China (-43% in HK) in 2009.

In the EU, FDI flows amounted to 356,000 million dollars in 2009, falling back 29%, a smaller fall than in 2008 (-40%).

As far as Spain is concerned, the figure for incoming FDI in the country was 25,800 million dollars, which is a decrease of 61% in comparison with 2008. Despite being larger than the overall fall for the EU, it is lower than figures for other European countries such as Hungary (-165%), Sweden (-64%), the Czech Republic (-63%) and of particular interest, the United Kingdom (-93%), which is habitually top of the ranking for incoming FDI in the EU. Spain was therefore the world’s 10th economy in terms of incoming investment.