Global Investment Trend Monitor Report – UNCTAD – Economics

Table of Contents

CURRENT AFFAIR

Global Investment Trend Monitor Report was released
According to it, India was among the top 10 recipients of Foreign Direct Investments (FDI) in 2019.

The global FDI marked a decline by 1% from revised $1.41 trillion ( in 2018) to $1.39 trillion (in 2019).
This was against the backdrop of weaker macroeconomic performance and policy uncertainty for investors in the midst of ongoing trade tensions.
Developing economies continued to attract more than half of global FDI flows, whereas, the FDI flows to developed countries decreased further by 6%.

United States remained the largest recipient of FDI, followed by China and Singapore.

South Asia recorded a 10% increase in FDI and this growth was driven by India marking a 16% increase in FDI inflows.
Inflows into Bangladesh and Pakistan declined by 6% and 20%, respectively.

India attracted $49 billion FDI inflows in 2019 as compared to $42 billion (in 2018). The majority of this went into services industries, including Information

Cross-border Mergers & Acquisitions (M&As) decreased by 40% in 2019 (the lowest level since 2014).
The underlying reasons for this fall were sluggish Eurozone growth and Brexit.
The fall in global cross-border M&As sales was deepest in the services sector (56% decline), followed by manufacturing (19% decline) and primary sector (14% decline).

Cross border Mergers and Acquisitions or M&A are deals between foreign companies and domestic firms in the target country.
Cross-border mergers and acquisitions involve assets and operations of firms belonging to two different countries.
Acquisition refer to the purchasing of assets or stocks of part or all of another firm (or other firms) that result in operational control of the whole or part of the other firm.
Mergers describe the case where two separate firms are combined or amalgamated into a single business.

UNCTAD expects FDI flows to rise moderately in
The GDP growth, gross fixed capital formation and trade are projected to rise, at the global level (especially in many large emerging markets).
Such an improvement in macroeconomic conditions could prompt Multinational Enterprises (MNEs) to resume investments in productive assets .

Significant risks persist, including high debt accumulation among emerging and developing economies, geopolitical risks and concerns about a further shift towards protectionist policies.