Global FDI flows slowed down in 2022, but new investment showed modest growth, FDI in figures, OECD, Apr. 2023.

▪ Global FDI flows dropped by 24% in 2022, to USD 1 286 billion, after large withdrawals of capital by a telecommunication MNE operating in Luxembourg. Excluding Luxembourg, global FDI flows declined by 5% in 2022 compared to the previous year.

▪ Major FDI recipients recorded lower FDI flows in 2022, particularly China and the United States partly as a result of reduced new investment activity.

▪ Nevertheless, the United States and China were the top two FDI destinations worldwide in 2022, followed by Brazil, receiving peak level of inflows partly due to increased reinvestment of earnings.

▪ FDI inflows in OECD economies fell by 26% due to disinvestments from Luxembourg, which were in part offset by large increases in Switzerland and the United Kingdom. FDI inflows in non-OECD G20 economies dropped by 38%, mainly reflecting decreases in China.

▪ FDI outflows from OECD and non-OECD G20 countries plunged by 14% and 28%, respectively.

▪ Cross-border M&A activity slowed down with fewer deals being concluded in 2022, possibly in response to a tighter financial environment, continued geopolitical challenges and concerns about a looming recession.

▪ However, the outlook for greenfield investment activity remained positive in 2022. While announced capital expenditure grew in advanced and emerging and developing economies, the number of projects still remained below pre-pandemic levels.

(To be continued)

https://www.oecd.org/daf/inv/investment-policy/FDI-in-Figures-April-2023.pdf