With corporations and national governments both fondling foreign direct investments since at least the 1970s, this type of investments has since grown from $10 bn to over $1.000 billion.
Lowest in 13 years
Yet according to new data from the United Nations Conference on Trade and Development (UNCTAD), there was a global slump in FDI in the first six months of 2018 – cutting it by 41 percent from one year earlier and setting it back to levels not seen since 2005.
The report is discussed thoroughly in a newly published news piece on the website of Treasury Today. It notes that the important FDI flows comprise cross-border mergers and acquisition activity, as well as intra-company loans and investments in start-up projects.
Some lose, some win
According to UNCTAD, the fall was mainly caused by US tax reforms, which have given incentives to big companies to bring earnings home from abroad, notably from Western Europe. The US-China trade war was another drag.
Even so, Treasury Today concludes, ”… as corporates revise their investment strategies in the light of the changing operating environment, some regions are experiencing a boom in investment”.