Foreign investment
flat at $2.63 billion

Growth rates slow to a halt

Foreign direct investment inflows (FDIs) are estimated to have increased 0.7 percent to $2.63 billion in 2017 compared with the previous year, according to the ‘World Investment Report’ by the United Nations Conference on Trade and Development (UNCTAD).

The annual FDI growth was 11 percent in 2016, according to the present report.

The sharp slowdown in FDI inflows comes amid a global and regional downtrend. Lebanon was one of only six countries in the West Asia region that witnessed an increase in FDI inflows.

Investments in destinations outside the country are estimated to have dropped 12 percent to $567 million in 2017. The rate of decline was three percent in 2016.



FDIs to the West Asia region dropped 16 percent to $26 billion in 2017. “Inflows to the region have been almost continuously declining since the peak of $85 billion in 2008,” the report said.

Global FDI flows plummeted 23 percent last year. “The decline is in stark contrast to other macroeconomic variables, which saw substantial improvement in 2017,” the UNCTAD report said. The global decline partly resulted from a 22 percent drop in the value of cross-border mergers and acquisitions. Even if the large one-off deals and corporate reconfigurations that inflated the 2016 FDI were discounted, the decline remains significant. The negative global FDI trend is mainly driven by a decrease in rates of return on foreign investment, according to the report.

“Downward pressure on FDI and the slowdown in global value chains are a major concern for policymakers worldwide and especially in developing countries,” said Mukhisa Kituyi, Secretary-General of UNCTAD. Investment in productive assets is necessary for sustainable development in the poorest countries, he said.