Foreign Investment

The outlook for foreign investment is beginning to look a bit brighter after more than a year of severe shock from COVID-19.

The pandemic affected output and trade, and caused global foreign direct investment flows to fall by more than 40 percent.

While global trade rebounded in the second half of 2020, FDI remained weak. But with the global economy expected to grow by 4 percent in 2021, foreign investors may be ready to plan for future expansion-with caution.

Results from the latest World Bank’s quarterly Global Pulse Survey of multinational enterprises in developing countries show a stabilizing investment outlook for MNEs compared with earlier rounds of the survey.

Three-quarters of respondents surveyed in the fourth quarter expected to maintain their current level of investment and very few expected to reduce investment.

MNEs also reported limited plans for a significant reorganization of investment locations, models. Still, uncertainty over the course of the economic recovery remains.