Global flows of foreign direct investment (FDI) fell by 16 percent in 2017 to an estimated 1.52 trillion U.S. dollars, from a revised 1.81 trillion dollars in 2016, the UN Conference on Trade and Development (UNCTAD) said Monday.
UNCTAD released its Global Investment Trends Monitor and said the results were surprising in view of other positive economic indicators.
"FDI recovery continues to be on a bumpy road," said UNCTAD Secretary-General Mukhisa Kituyi. "While FDI in developing countries remained similar to the previous year, more investment in sectors that can contribute to the Sustainable Development Goals is still badly needed."
A slump in FDI flows to developed countries, down 27 percent, was the principal factor behind the global decline with the such investment down 32 percent in the United States and 90 percent in Britain.
This decline was softened by an 11 percent growth in flows to other developed economies, principally Australia.
Asia was largest region getting FDIs, said James Zhan, Director of UNCTAD's Investment Division, noting that inflows into China reached another record level.
"The decline of global FDI flows is in stark contrast to other macroeconomic variables, such as GDP and trade growth, which saw substantial improvements in 2017," said Zhan at a UN briefing.
"Upward synchronization of the trends in 2018 is probable, but risks are abundant," he cautioned.
FDI to developing economies remained stable, at an estimated 653 billion U.S. dollars, 2 percent more than the previous year.
Flows rose marginally in developing Asia and Latin America and the Caribbean, and remained flat in Africa. Developing Asia regained its position as the largest FDI recipient region in the world, followed by the European Union and North America.
In the world's transition economies, FDI declined by 17 percent to an estimated 55 billion U.S. dollars, mainly due to a drop in the Russia and lackluster inflows across most of the Commonwealth of Independent States (CIS).
