YEREVAN, June 17. /ARKA/. Global foreign direct investment (FDI) flows slid by 13% in 2018, to US$1.3 trillion from $1.5 trillion the previous year – the third consecutive annual decline, according to UNCTAD’s World Investment Report 2019.
According to it, the contraction was largely precipitated by United States multinational enterprises repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017, designed for that purpose.
The report says FDI flows to the transition economies of South-East Europe and the Commonwealth of Independent States (CIS) continued on their steep downward trend in 2018. Investment to the region declined by 28 per cent to $34 billion.
The contraction in FDI was driven by the halving of flows to the Russian Federation, by far the biggest economy and largest recipient in the group, from $26 billion to $13 billion. Some other large recipients in the region – Azerbaijan, Kazakhstan and Ukraine – also experienced declines in inflows.
Flows to the CIS and Georgia contracted by 36 per cent to $27 billion. The decline affected seven of the 12 countries in that subgroup (the exceptions were Armenia, Belarus, the Republic of Moldova, Tajikistan and Uzbekistan). Investor sentiment remained cautious, in part due to geopolitical concerns and sluggish GDP growth.
FDI flows to Kazakhstan – the biggest of the nine landlocked CIS countries and the third largest recipient of FDI among transition economies – declined again. Large divestments brought FDI down by 18 per cent to $3.8 billion. -0-
