THE
8 July, 2024
LABORECON E c o n o m y | Mo n e t a r y | G e o g r a p h y | C l i m a t e | C o r p o r a t e Falling direct investment hurts developing countries in particular because it tends to be their largest external source of nancing. L a s t y e a r, F D I f l o w e d t o developing countries fell by seven per cent, to $867 billion, UNCTAD said, re ecting an eight per cent decrease to developing countries in Asia. Flows to Africa meanwhile slumped three per cent, to $53 billion.
Global tensions hit investments again in 2023: UN — TLE Desk Worldwide foreign direct investment fell for a second consecutive year in 2023 amid a global economic slowdown, coupled with swelling trade and geopolitical tensions, the United Nations said Thursday. Foreign direct investment (FDI) fell by two per cent to $1.3 trillion last year, according to a fresh report from the UN Trade and Development Agency, reports AFP. But excluding a few exceptions, the report showed a far sharper decline of more than 10 per cent in FDI for the second consecutive year, it cautioned. UNCTAD said the prospects for FDI remained “challenging” in 2024, but highlighted some positive developments. It cited the easing of nancial conditions and concerted e orts towards investment facilitation, “a prominent feature of national policies and international agreements”. “We think that 2024 will be better,” UNCTAD chief Rebeca Grynspan told reporters in Geneva. “There are signs that there will be a modest growth in 2024,” she said.
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“It’s a modest growth, but it’s a change of tendency, so we are more optimistic towards 2024.”
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But UNCTAD highlighted that the continent was attracting “a growing share of global mega projects, with six valued at more than $5 billion”. In ows to most parts of Europe and North America were down by 14 per cent and ve per cent respectively, the report showed. The largest greenfield announcement for any country in 2023 was a green hydrogen project i n Ma u r i t a n i a , e x p e c t e d t o generate $34 billion in investment, the agency said, pointing out that that was “several multiples of the country’s gross domestic product”. As for foreign direct investment ows to developed countries, they were heavily impacted by the nancial transactions of multinational enterprises, UNCTAD said. This was “partly due to e orts to implement a global minimum tax r a te o n t h e p r o f i t s o f t h e s e corporations”, it said.