The World Investment Report 2023 reveals that there was a Global decline in FDI. The total amount of FDI dropped by 12% to $1.3 trillion in 2022. However, it’s worth mentioning that China was different from other countries in this regard. China experienced a positive change with a 5% increase in FDI during the same time period.
Global FDI Trends
In 2022, international investment from other countries went down by 12 percent, reaching $1.3 trillion. This decrease happened because of several problems happening all over the world, like the ongoing conflict in Ukraine, high prices for basic things like food and energy, and the increasing burden of debt on several economies.
In 2022, the decline in foreign direct investment (FDI) was primarily due to the financial activities of multinational companies in developed nations. FDI decreased by 37 percent, reaching a total of $378 billion. However, there was a 5 percent rise in the number of new projects and announcements related to financing and constructing new facilities.
In the less fancy countries, foreign direct investment (FDI) went up by 4 percent to a whopping $916 billion, which is like, more than 70 percent of the total global investments. Can you believe that?! It’s the biggest share ever seen! And get this, the number of new investment projects in those countries also shot up by a solid 37 percent, while international project financing deals climbed by a cool 5 percent. Talk about good news for folks looking to invest in industries and infrastructure!
FDI in Developing Countries in AsiaÂ
In 2022, the total amount of money invested by businesses from other countries in developing countries in Asia was $662 billion. This was the same as the amount invested the year before. Even though the amount of investment stayed the same, these countries continued to receive a lot of investment. India and the ASEAN region were especially successful in attracting investment.
Global decline in FDI refers to the decrease in foreign direct investment worldwide. This decline can have significant economic implications as it represents a reduction in cross-border investments and international business activities. It is important to analyze the reasons behind this decline and explore possible strategies to reverse this trend and stimulate global economic growth.
$4 trillion annual investment gap for global goals
The report says the investment gap across all sectors of the Sustainable Development Goals (SDGs) has increased to more than $4 trillion per year from $2.5 trillion in 2015.
The text highlights the significant gaps in energy, water, and transport infrastructure. These gaps have arisen due to a combination of insufficient investment and the need for additional infrastructure. It is worth noting that developing countries are experiencing a growing investment gap in achieving Sustainable Development Goals (SDGs). This stands in contrast to the positive sustainability trends observed in global capital markets. In fact, the sustainable finance market has reached a value of $5.8 trillion in 2022.
