UNCTAD ‘Investment Trends Monitor’ Report

The UN Conference on Trade and Development (UNCTAD) Investment Trends Monitor was published on January 19, 2022.

Key findings of the report

• As per report, in 2021 the Foreign Direct Investment (FDI) flows to India were 26 per cent lower as compared to 2020, because large M&A deals recorded in 2020 were not repeated.
• Global FDI flows showed a strong rebound in 2021. It grew to 77 per cent to an estimated USD 1.65 trillion. In 2020, the FDI flow was USD 929 billion.
• Recovery of investment flows towards developing countries is encouraging. However, stagnation of new investment, in least developed countries across industries important for productive capacities and key Sustainable Development Goals (SDG) sectors like food, health and electricity, is a major cause for concern.
• As per report, developed economies witnessed biggest rise by far. FDI reached to an estimated USD 777 billion in 2021, which is three times than in 2020.

FDI flows across different countries

• FDI flows across developing economies increased by 30 per cent. It reached to around USD 870 billion. In East and South-East Asia, growth accelerated by 20 per cent. This recovery is close to pre-pandemic levels in Latin America and the Caribbean.
• FDI flows to South Asia decreased by 24 per cent. In 2021, it reached to USD 54 billion as compared to USD 71 billion in 2020.
• FDI flows to South Asia decreased by 24 per cent. In 2021, it was measured at USD 54 billion as against USD 71 billion in 2020.
• In United States, FDI increased by 114 per cent to USD 323 billion. Also, the cross-border M&As almost tripled to USD 285 billion.
• Out of total increase in global FDI flows in 2021, around three quarters or USD 500 billion was recorded in developed economies.

FDI flow in India and China

FDI Flows to India decreased by 26 per cent because large M&A deals recorded in 2020 were not repeated. While in China, FDI increased by 20 percent to USD 179 billion. It was driven by strong services FDI.