Global FDI flows were 24% higher in the first half of 2019 compared with the first half of 2018, according to the latest issue of Unctad’s Global Investment Trend Monitor.  

However, the underlying FDI trend was an increase of 4%, excluding factors such as one-off transactions and intra-financial flows, which includes repatriations as the consequence of the 2017 US tax reforms. 


The results were mainly due to the negative flows of accumulated retained earnings by US multinationals. The aftermath of the 2017 US tax reforms led to a significant decline of such stocks including a one-time fallout on flows caused by repatriations. 

The increase in FDI in the first half of 2019, reaching $640bn, appear substantial due to the unusually low levels of investment in the first six months of 2018, reaching $517bn. Nonetheless, these numbers remain beneath the average of the past decade. 

Developed economies received $269bn in the first half of 2019, thereby almost doubling last year’s unusually low figures. 

Flows targeting developing economies remained at a solid $342bn because they were less affected by US repatriations, registering a 2% decline compared with the first six months of 2018. Furthermore, from the first half of 2018, the FDI flows to transition economies climbed to 4%, reaching an estimated $28bn. 

Unctad’s forecast for 2019 as a whole suggests an increase of 5% to 10%. The revival of flows into developed economies is expected to continue. 

Developing countries are predicted to experience stability, with growth focused in south-east Asia. This region in particular is considered to be an engine of growth, reporting an FDI increase of 29% compared with 2018. Bangladesh, in particular, recorded a 50% FDI increase in the information technology industry.

Conversely, Latin America and the Caribbean showed a 4% fall from the first half of 2018, and  Africa experienced a 2% decline compared. 

The greatest challenges to FDI growth are trade tensions and weaker global economic activity. 

Trade related to global value chains – which is fuelled largely by FDI – is on a negative trend. Foreign value added, a key indicator, has reached its lowest ebb in a decade, at 28% of global trade, falling sharply from a historic peak of 31% in 2008. Unctad’s latest report shows that stagnation in the activity of the global value chains is likely to continue in the coming years.

Although mainstream FDI has increased, greenfield investment in the first half of this year has decreased compared with last year, according to fDi Markets.