Latest news with #ForeignDirectInvestment
CTV News
a day ago
- Business
- CTV News
Global investment decline may worsen due to tariffs, UN trade agency warns
GENEVA -- Global foreign direct investment fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the United Nations agency for trade and development said in a report published on Thursday. Foreign Direct Investment transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to UNCTAD. Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD Secretary-General Rebeca Grynspan described as a 'poison' for investor confidence. 'We are even more worried about the picture in already feel that investment is are affecting growth,' Grynspan told Reuters, with short-term risk management being prioritized over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies - which act as intermediary hubs where investments temporarily pass through before reaching their final destinations - are included, the data showed that FDI increased by 4% to US$1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. 'We see a very worrying that has a real impact on jobs and infrastructure is going down,' she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the U.S., while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing $225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology. Reporting by Olivia Le Poidevin, editing by Ed Osmond, Reuters
Zawya
a day ago
- Business
- Zawya
Global investment decline may worsen due to tariffs, UN trade agency warns
Global foreign direct investment fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the United Nations agency for trade and development said in a report published on Thursday. Foreign Direct Investment transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to UNCTAD. Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD Secretary-General Rebeca Grynspan described as a "poison" for investor confidence. "We are even more worried about the picture in already feel that investment is are affecting growth," Grynspan told Reuters, with short-term risk management being prioritised over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies - which act as intermediary hubs where investments temporarily pass through before reaching their final destinations - are included, the data showed that FDI increased by 4% to $1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. "We see a very worrying that has a real impact on jobs and infrastructure is going down," she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the U.S., while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing $225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology.
Yahoo
a day ago
- Business
- Yahoo
Global investment decline may worsen due to tariffs, UN trade agency warns
By Olivia Le Poidevin GENEVA (Reuters) -Global foreign direct investment fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the United Nations agency for trade and development said in a report published on Thursday. Foreign Direct Investment transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to UNCTAD. Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD Secretary-General Rebeca Grynspan described as a "poison" for investor confidence. "We are even more worried about the picture in already feel that investment is are affecting growth," Grynspan told Reuters, with short-term risk management being prioritised over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies - which act as intermediary hubs where investments temporarily pass through before reaching their final destinations - are included, the data showed that FDI increased by 4% to $1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. "We see a very worrying that has a real impact on jobs and infrastructure is going down," she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the U.S., while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing $225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Indian Express
4 days ago
- Business
- Indian Express
‘Alarm bells' for developing nations as 2023 FDI lowest since 2005
Foreign Direct Investment (FDI) into developing countries fell to $435 billion in 2023, the lowest in nearly 20 years, the World Bank said Monday, warning that rising trade and investment barriers posed a 'significant threat to global efforts to mobilise financing for development'. According to the Bank, the fall in FDI into developing nations was part of a global trend that saw similar flows into advanced economies declining to $336 billion in 2023, the lowest level since 1996. 'What we're seeing is a result of public policy,' Indermit Gill, the World Bank Group's Chief Economist, said. 'It's not a coincidence that FDI is plumbing new lows at the same time that public debt is reaching record highs. Private investment will now have to power economic growth, and FDI happens to be one of the most productive forms of private investment. Yet, in recent years governments have been busy erecting barriers to investment and trade when they should be deliberately taking them down. They will have to ditch that bad habit.' According to M. Ayhan Kose, the World Bank Group's Deputy Chief Economist, the sharp drop in FDI for developing countries 'should sound alarm bells'. Reversing the trend, Kose said, was not just an 'economic imperative' but also 'essential for job creation, sustained growth, and achieving broader development goals'. 'It will require bold domestic reforms to improve the business climate and decisive global cooperation to revive cross-border investment,' Kose said. In 2022, FDI into emerging market and developing economies (EMDEs) stood at $690 billion. While data for the 2023 calendar year is the latest available at a global level, FDI into India as per Reserve Bank of India (RBI) data increased to $81.04 billion in 2024-25 from $71.28 billion in 2023-24. However, net FDI into India – which adjusts the gross FDI number by deducting the funds repatriated by foreign investors and the investments made by Indian entities abroad – fell to just $353 million in the last fiscal from $10.13 billion in 2023-24. Among EMDEs, China has been the biggest receiver of FDI from 2012 to 2023, accounting for nearly one-third of these inflows. Brazil was second at 10 per cent and India third at 6 per cent, the World Bank said. According to the Bank, foreign investments are increasingly 'decoupling along geopolitical fault lines', with the US reducing its ties from China even as it increased trade and FDI links with India, Mexico, and Vietnam. 'Russia's invasion of Ukraine in 2022 was followed by rapid divestment by foreign firms from Russia,' the World Bank said in its report 'Foreign Direct Investment in Retreat'. The release of the report on Monday comes ahead of the 4th International Conference on Financing for Development in Spain from June 30 to July 3. At the conference, representatives from governments, international institutions, civil society organisations, and the private sector are expected to discuss how to mobilise funds to achieve key global and national development goals at a time when global growth is slowing down, public debt is at record highs, and foreign aid budgets have been cut. Last week, the World Bank cut its global growth forecast for 2025 by 40 basis points to 2.3 per cent – the lowest since 2008 outside of outright global recessions – with Indermit Gill warning that outside of Asia, the developing world was becoming a 'development-free zone'. According to the World Bank, developing economies must redouble their efforts to attract FDI, starting with relaxing restrictions from the last decade and rapidly improving the investment climate. In addition, amplifying the economic benefits of FDI and advancing global cooperation were also identified as policy priorities. 'All countries should work together to accelerate policy initiatives that can help direct FDI flows to developing economies with the largest investment gaps,' the Bank said.
Japan Times
31-05-2025
- Business
- Japan Times
Japan seeks to grow Africa investments to ease reliance on China
Japan is supporting its companies to grow their business in Africa and develop trade ties across a continent where it's mainly been seen as a key donor. The second-biggest Asian economy's emergence from a three-decade period of deflation has boosted its private sector's risk appetite, Takehiko Matsuo, vice-minister for International Affairs at the Ministry of Economy, Trade and Industry said in Abidjan, the commercial hub of Ivory Coast. "Now the mindset of Japanese business leaders has changed dramatically and they are now much more proactive about expanding their business globally,' Matsuo said. "Africa is one of the destinations where we expect Japanese companies' to grow their presence. Japan is reasserting a commitment to do more business with Africa as it emerges from years during which its private sector was particularly risk-averse. The government has yet to declare an end to the deflation that gripped the economy for decades. Still, data this month showed consumer prices have advanced at or above the Bank of Japan's 2% inflation target for three straight years. Japan's net external assets reached a record high in 2024 as its investors and companies continued to load up on holdings abroad, with the U.S. and U.K. the prime destinations for foreign direct investment. So far, only a trickle of that has reached Africa, with the continent receiving about 0.5% of Japan's foreign direct investments. For Africa, Japan's push to recalibrate its relationship also comes at a critical time. Mobilizing private investment has become more pressing since President Donald Trump returned to the White House, slashing U.S. aid. But it could be a win-win. By 2050, 1 in every 4 people will likely be African, and Goldman Sachs Group research projects that, by 2075, six of the biggest economies in the world could be in the Global South, including Nigeria — a point cited by the Japanese ministry. Key sectors of interest for Japan include critical minerals, base metals and rare earths as the government seeks to reduce its reliance on China, coincidentally Africa's top trading partner. "We are pretty much depending on Chinese companies,' Matsuo said. "I'm not saying that we cannot work with Chinese companies, but only depending on one country may be causing some vulnerability.' Japanese trading house Mitsui & Co. emerged as the highest bidder for a stake in First Quantum Minerals Ltd.'s Zambian copper mines, Bloomberg reported in November. Beyond mining, Japanese corporations are also looking to bring new technologies to Africa, sometimes backed by government subsidies, Matsuo said. Fujifilm is exploring preventive medical-care services, a technology that's especially relevant in a region with low health insurance penetration, and Toyota Tsusho is looking into introducing automobile recycling systems, Matsuo said. Hitachi Construction Machinery has also been working on hybrid dump trucks to help green mining operations. Japanese investors also have an appetite for green hydrogen and ammonia that can be used to decarbonize industries, he said. It's not only corporations seeking to work more on the continent. Japan announced an initiative this month to connect Japanese and African startups to foster innovation. Within members of the Organization for Economic Cooperation and Development, Japan was sub-Saharan Africa's third-biggest providers of overseas development assistance in 2022, with $1.68 billion in gross disbursements, according to government data. Unlike the U.S. or the U.K., it's not announced plans to reduce its aid so far. "This year, we will have the biggest meeting for collaboration between Japan and African countries,' Matsuo said, referring to the ninth edition of the Tokyo International Conference on Africa Development holding in Yokohama in August. "In that sense, we are rather making efforts to expand our cooperation.'
