Global Foreign Direct Investment (FDI) flows in the first half of 2021 were $852 billion. The data are from the UN Conference on Trade and Development (Unctad) and are contained in a report presented this Tuesday in Geneva. 

For Unctad, the volume was stronger than expected and the increase in investments was enough to recover more than 70% of the Covid-19 pandemic-induced losses last year. 

Unctad Investment Director James Zhan said that the rapid recovery in Foreign Direct Investment "masks the growing divergence between developed and developing countries." According to Zhan, uncertainties remain many.  

In developed economies, FDI reached the $424 billion mark in the first half of this year. Three times higher than the exceptionally low levels of 2020.  

According to Unctad, FDI flows into Europe have increased considerably, averaging only 5% lower than pre-pandemic levels.

In the United States, entries were up 90%, thanks to an increase in cross-border mergers and acquisitions.  

Scenario in rich countries

Developing countries also saw a surge in FDI flows, totaling $427 billion in the first half of the year, with rapid acceleration mainly in East and Southeast Asia.  

Unctad also points out that investor confidence is higher especially in the infrastructure sector, thanks to favorable long-term financing conditions, stimulus packages, and programs for international investment.  

On the other hand, investor confidence in industry and global value chains remains shaky, with total new projects in the electronics, automotive and chemical sectors falling.  

Unctad also highlights that the recovery of investments in sectors relevant to the Sustainable Development Goals also remains "fragile." Investments in "green" sectors increased 60%, due to a small number of large deals in the energy sector.  

The report describes a positive scenario, with FDI flows continuing to recover to pre-pandemic levels. At the same time, Unctad reminds that the duration of the health crisis, the pace of vaccination, especially in developing countries, and the speed of implementation of stimulus for investments in the infrastructure sector remain major factors of uncertainty.  

Source UN News