Global FDI inflows continued a moderate recovery in the first half of 2011, according to figures from the UN Conference on Trade and Development (Unctad).

Amidst uncertainties in the global economy, there are indications of FDI growth decelerating in the second half of the year. While Unctad's seventh Global Investment Trend Monitor remains cautiously optimistic for the full year, projecting FDI flows close to the pre-crisis average, downside risks have intensified.

Overall inflows rose in the first half of 2011 by 2% compared with the first half of 2010, continuing the 5% moderate recovery observed in 2010. (Unctad’s figures include both greenfield investment and mergers and acquisitions [M&A] and various types of portfolio investments.)

However, amidst turmoil in financial markets, preliminary third-quarter data on crossborder M&As and greenfield investment indicate an FDI growth deceleration.

Developing and transition economies continued to account for more than half of global FDI inflows in the first half of 2011. Almost all developing regions saw their FDI rising, driven by increasing flows to large emerging markets (China, India, Brazil, South Africa and Russia). In contrast, developed economies, as a group, experienced a slight decline in their inflows, with some major host countries – the US, France and Germany – posting declines in the first half of 2011.

fDiIntellgence's global greenfield investment figures -- which exclude M&A deals -- show a 6% decline in project numbers in the first half of 2011 over the same period the previous year, along with a 10% drop in capital expenditure on projects and an 18% drop in the number of jobs created through greenfield FDi projects.