Foreign investment
down to $2.34 billion

Outbound funds drop by half

The inflow of foreign direct investment (FDI) decreased in 2015 by 19 percent to $2.34 billion compared to 2014. FDI outflows have plunged by 49 percent to $619 million. This has led to an increase of almost 46 percent in net flow investments.

FDI inflows grew by 6.6 percent in 2014 compared to 2013.

The figures were reported by the World Investment Report 2016 (WIR), published by the United Nations Conference on Trade and Development (UNCTAD.

Real estate is the largest contributor to the drop in FDI, said Roger Melki, economist and consultant at Bank BEMO. The hospitality, tourism, and industrial sectors are also witnessing a decline, he said.

Melki said that most major economic indicators in the country remain acceptable.

FDI to West Asia, which includes Turkey and Arab countries located in Asia (the Levantine and the Gulf states), dropped by 2.1 percent to about $42.4 billion during the same period, according to the report.

Weakening demand in the Gulf region for services produced locally, such as engineering, legal, and insurance services, have also contributed to a drop in investment in this sector, Melki said. The regional and domestic political tensions don’t encourage investment, he said.

According to Melki, most FDI inflows come from Lebanese expatriates and are crucial for future economic growth.