Foreign direct investments worldwide are projected to return to pre-crisis levels this year, with inflows expected to be up to $1.60 trillion, according to a UN report.
UNCTAD’s World Investment Report 2011 released in New Delhi on Tuesday said that recovery of FDI inflows would continue this year while pegging the amount at around $1.40 trillion to $1.60 trillion.
Bogged down by the 2008 financial meltdown and its ripple effects, FDI worldwide tumbled to just $1.19 trillion in 2009. Last year, the inflows were slightly better at $1.24 trillion.
In 2008, FDI flows stood at $1.74 trillion. “The record level of cash holdings, low rates of debt financing and rising stock market valuations of transnational corporations should encourage them to expand overseas...,” the report said.
Last year, more than half of the global FDI inflows were into developing countries and transition economies. However, foreign direct investments in services as well as in the financial industry slumped during 2010.