São Paulo – Global foreign direct investment (FDI) fell 41% in H1, in comparison to the same period of last year, to USD 470 million, according to the Investment Trends Monitor, shown this Monday (15) by the United Nations Conference on Trade and Development (UNCTAD).
The drop, according to UNCTAD, was heavily influenced by foreign earnings repatriations by North American parent companies after US tax reforms. In the picture above, New York’s Stock Exchange.
However, the FDI decline is in contrast with the volume of international mergers and acquisitions registered in the same period and with investment announcements.
UNCTAD’s publication reports that mergers and acquisitions generated USD 371 billion in H1, a similar figure to H1 2017, and new investment announcements totaled USD 454 billion, up 42% in the same comparison.
The decline of FDI flows in H1 occurred due mainly in the developed countries (-69%), with developing nations posting a drop of only 4%. In this sense, the share of developing economies in the global FDI flow reached 66%.
In Latin America, the investment total dropped 6% in H1, with Brazil registering the sharpest decline in South America, with 22%. Even so, the country stood at the 9th position among the world’s top FDI destination in the period, with USD 25.5 billion.
Among Arab countries, Egypt was the highlight, with investment inflow to the country climbing 24% in H1, putting the country as the top African destination. Another highlight was the United Arab Emirates, with oil and gas mergers and acquisitions generating USD 6 billion.
Translated by Sérgio Kakitani
