São Paulo – The worldwide flow of foreign direct investment (FDI) reached US$ 1.5 trillion in 2011, up 16% from 2010 according to the World Investment Report 2012 issued last Thursday (5th) by the United Nations Conference for Trade and Development (Unctad).
According to the Unctad, the figure has exceeded the average for 2005 to 2007 for the first time, before the international financial crisis, but was still 23% lower than the annual record for 2007, which was approximately US$ 2 trillion.
Increased world economy instability, resulting from the European crisis, and lower growth perspectives in emerging countries have caused the Unctad to estimate a lower rate of growth for this year. Flows are expected to reach US$ 1.6 trillion in 2012. According to the report, from January to May there was a decline in international mergers and acquisitions and in investment in new projects.
The study suggests that multinational companies are saving money and waiting to see what will happen in the world economic scenario. In the Unctad’s yearly survey of multinational companies’ executives, half said they were “indecisive” or “neutral” regarding the world investment environment for this year.
According to the Unctad, the funds possessed by multinationals have reached a record high level at US$ 4 trillion to US$ 5 trillion and thus far, that hasn’t translated into sustainable growth of FDI flows, but may point to a future increase.
In that respect, the Unctad makes more optimistic investment flow forecasts for 2013 and 2014, at respectively US$ 1.8 trillion and US$ 1.9 trillion, barring future macroeconomic shocks.
*Translated by Gabriel Pomerancblum
