Global foreign investment plummeted to historic lows in 2020 as Covid-19 forced investors to push the brakes on expansion plans. 

Foreign investment projects worth an estimated $486.9bn were announced by global companies in 2020, which is $310.8bn (40%) less than in 2019, according to full-year data from investment monitor fDi Markets. This means that the pandemic has sunk global direct investment to its lowest level since 2003, when the fDi Markets series began. Even in the aftermath of the global financial crisis, it had not fallen below the $589.4bn mark, according to fDi Markets. 


While the dip has spread quite evenly across the board, for the most part, a few sectors have felt the Covid chill more than others. 

The pandemic has obliterated investment in the tourism sector, following the draconian travel restrictions placed on as billions of people throughout 2020. A full recovery is not expected any time soon. Announced foreign investment in the tourism sector fell from $48.5bn in 2019 to $12.6bn in 2020, fDi Markets figures show. 

Other notable victims were real estate and the oil and gas sector. The pandemic seems to have dramatically accelerated the paradigm shift in the energy industry, with oil prices even charting in negative territory for a few weeks and international oil companies writing off assets for billions of dollars. Announced investment projects in coal and oil and gas plummeted to $42.1bn in 2020, from $112.3bn a year earlier, fDi Markets data show. Real estate, particularly commercial real estate, was also heavily affected by the paradigm shift prompted by Covid-19. Foreign investment in the sector fell to $34.3bn in the year, halving from a year earlier, according to fDi Markets. 

There are also exceptions, though. Covid-19 has boosted investment in activities related to the digital economy. First and foremost, investments into telecommunications infrastructure, equipment and services has grown to $50.1bn, up by 30% from a year earlier. With the pandemic demanding answers from labs across the world, foreign investors continued to pour money into the biotech sector too, announcing projects worth $6.6bn in 2020, up from $4.2bn a year earlier, fDi Markets figures show. 

Although it did not technically buck the trend, the renewable energy sector also features among the exceptions as it maintained its record high trajectory. Foreign investors announced projects in wind, solar and other renewable energy sources worth $80.8bn in 2020, down by 17% from a record 2019; however, this is its second best performance to date, and enough to become the biggest single catalyst of foreign investment in the global economy ahead of oil and gas and real estate for the first time on records, fDi Markets figures show. 

The outlook on global investment remains gloomy as the world is coming to terms with the pandemic’s long tail, and the inevitable logistics and capacity challenges of the largest vaccine campaign in human history. The fDi Index, a proxy of investment sentiment, stood at 583 points in December, down by 23.98% from a year earlier and pretty much stable from the previous five months. Unctad expects overall foreign direct investment (FDI) to remain ‘weak’ in 2021, and is not expecting a recovery before 2022. The global FDI community seems to agree, although there is also some consensus over the potential for selected sectors, such as renewables, semiconductors and others, to buck the trend once again. 

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