The Latest Trends in Global FDI Flows

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The Latest Trends in Global FDI Flows

• Ing. Tomá Dudá, PhD.

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2007 Best year ever for global FDI

• The global FDI flows continued in the growth that
  begun in 2004
• Global FDI inflows reached 1,833 bil. USD and
  were 30 higher than in 2006
• All there major country groups (developed
  countries, developing countries and transition
  economies) saw continued growth
• But - Growth varied greatly among regions and
  countries

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Continuing rise of cross-border MA transactions

• Increase by 23 to 880 billion USD
• The number of transactions grew by 16 to 6 974
• Main factor growing stock markets and global
  optimism
• Increase of so called Mega-deals (value larger
  than 1 bln. USD) 172
• The majority of transactions takes places in
  North America and Western Europe
• New trend developing countries are increasing
  their role as buyers (mainly China, India and
  Russia)
• Most important sectors consumer goods, service
  industries and energy supply
• Increasing role of private equity funds (18 of
  global MA activity)

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Regional trends
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Regional trends - Africa

• FDI inflows amouted to 56 bln. USD a new record
  level
• Still Africas share in the global inflows is
  unstubstantial (2,7 )
• The FDI inflows rose by 20 in 2006 (in
  comparison with 2005)
• The growth was induced mainly by the growth of
  commodity prices that led to an increased
  interest in the extractive industries (mainly oil
  and natural gas)
• TNCs from Asia expanded rapidly in Africa in 2006
• Huge polarization the Top 10 recipients gained
  32 mld. USD (approx. 2/3 of the total inflow)

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Regional trends Asia and Oceania

• Record FDI inflows in 2006 249 bln. USD
• Substantial FDI outflows 150 bln. USD
• Southeast Asia is the most popular investment
  destination nowadays in 2006 it gained FDI in
  amount of 189 bln. USD
• China and Hong-Kong are the most popular
  countries with 83 bln. USD and 59 bln. USD
• Singapore 23 bln. USD
• India 22 bln. USD
• High concentration of FDI inflows

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Regional trends Asia and Oceania

• West Asia FDI inflows grew by 12 and reached
  71 bln. USD
• The inflows are concentrated in three countries
  Turkey, Saudi Arabia and United Arab Emirates
• These three countries account for the 4/5 of the
  global FDI inflows
• Several successful privatizations banking and
  telecom
• Increased investment into the oil sector
• Improving business climate in western Asia

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Regional trends Latin America and the Caribbean

• FDI flows into this region grew by 36 and
  reached record level 126 bln. USD
• The main factor of the rising FDI inflow
  surging commodity prices
• FDI inflows into off-shore centres is decreasing
• Main entry mode greenfield investments
• Brazil and Mexico were the leading countries in
  FDI inflows with 34 and 26 bln. USD

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Regional trends Developed Countries

• FDI inflows surged to all-time high 1 248 bln.
  USD (33 )
• The surge was driven by quick growth of MA
  transactions
• FDI inflows into North America grew by 14
  driven by buoyant consumer demand and large
  corporate profits
• USA world leader in FDI inflows with 233 bln.
  USD
• Inflows into EU countries grew by 43 up to 804
  bln. USD
• Inflows into Japan increased after several years
  - 23 bln. USD

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2008 The Party Is Over

• The first data available suggests a 20
  decrease in FDI flows
• The decrease will accelerate in 2009

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