Global FDI dips, hit by Hong Kong divestment, Brexit: UN

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Jan 22, 2020 06:00 am

GENEVA Global direct foreign investment (FDI) dipped slightly around the world last year, hit by massive divestment in Hong Kong and a drop in flows into Britain due to Brexit uncertainty, the United Nations said.

FDI could rise marginally this year on the back of modest growth as trade tensions between China and the US ease, but geopolitical uncertainties and protectionist pressures are tempering expectations, it said.

Last year, global FDI flows were estimated at US$1.39 trillion (S$1.87 trillion), down 1 per cent from a revised US$1.41 trillion in 2018, the UN trade and development agency UNCTAD said in a report.

FDI, which includes cross-border mergers and acquisitions, intra-company loans and investments, is a bellwether of globalisation and a potential sign of future growth of corporate supply chains.

Investment flowing into Hong Kong, which has been wracked by political unrest, nearly halved last year to US$55 billion, the report said.

Britain, beset by uncertainty over Brexit but now on course to leave the European Union on Jan 31, saw inward FDI flows shrink by 6 per cent last year, according to the report. - REUTERS