Global FDI flows stood at $1390bn in 2019, representing a fall of just 1% from the revised $1410bn recorded in 2018, according to the Global Investment Trends Monitor produced by Unctad. 

Developed economies witnessed a 6% fall to an estimated $643bn of FDI inflows in 2019, while inflows to developing economies remained unchanged at $695bn.

FDI flows to transition economies rose by two-thirds to $57bn in 2019, while the effect of the 2017 US tax reform, which reduced US outward flows and global FDI in 2018, appears to have decreased.

A sharp 15% decline to $305bn of FDI flows to the EU conditioned the falling trend across all developed economies. The Netherlands had a 98% fall in FDI due to a large divestment, while FDI to the UK declined by 6% mainly due to a lack of large deals targeting the country amid Brexit uncertainty. 

While in aggregate developing economies’ FDI flows remained unchanged, FDI to Latin America and the Caribbean increased by 16%, while FDI flows to Africa rose by 3%. Developing Asia witnessed a decline of 6% in FDI flows, but continued to account for one-third of global FDI in 2019. 

Much of the decline in developing Asia was driven by a 21% decline in FDI to east Asia. Amid civil unrest that has persisted since spring
2019, FDI to Hong Kong almost halved to $55bn. 

Flows to South Korea fell by 46% to $7.8bn, ascribed to trade tensions and investment policy changes. On the other hand, FDI flows to Singapore surged by 42% to $110bn, ranking the small island nation as the third largest recipient of FDI worldwide, while Indonesia saw an uptick of 12% to $24bn.

Partially driven by a privatisation programme launched by president Jair Bolsonaro in July 2019, FDI flows to Brazil increased by 26% to $75bn. Inflows to the Caribbean grew by 49% to an estimated $4.2bn, as the Dominican Republic and Trinidad and Tobago saw upticks in investment.

Unctad expects FDI flows to
rise marginally in 2020 due to the expectation of modest growth in the global economy, sustained high corporate profits and hopes for diminishing trade tensions between the world’s two largest economies, the US and China.