Global FDI flows surge by 88% to reach $1.8 trillion in 2021
Global Foreign Direct Investment (FDI) flows rose by 88% in 2021 to reach 1.8 trillion.
This is per a new report on FDI flows released by the Organisation for Economic Co-operation and Development (OECD).
Per the report, recorded FDI flows were 37 percentage points above pre-pandemic levels.
Majority of the FDI flows per the new report to went most of the countries that constitute the Organisation for Economic Co-operation and Development (OECD).
This resulted in the USA and China for instance, recording $382bn and $334bn FDI inflows for 2021.
The surge in FDI the report asserts, was driven mainly by record high earnings of foreign-owned businesses that were not distributed back to parent companies.
For Ghana, FDI inflows received for 2021 is yet to made public by the country’s foremost investment agency, the Ghana Investment Promotion Centre (GIPC).
However, in the year 2020, total FDI to Ghana was some $2.65bn.
Find below some highlights from the OECD FDI report:
- Global FDI flows bounced back in 2021, growing by 88% to USD 1,815 billion, and 37% above prepandemic levels. However, the outlook remains uncertain given the current geopolitical context.
- This growth was driven by OECD area earnings on inward and outward FDI reaching some of their highest levels since 2005; of those earnings, less was distributed to shareholders, resulting in unprecedented levels of reinvestment of earnings. Inflows to the OECD area exceeded pre-pandemic levels by 5% and outflows reached a seven-year record-high, boosted by high levels of reinvestment of earnings.
- FDI inflows to non-OECD G20 economies were 47% above pre-pandemic levels. FDI outflows to non-OECD G20 economies were 20% above pre-pandemic levels.
- In 2021, the United States was the top FDI destination worldwide, followed by China, Canada and Brazil.
- The United States was also the largest source of FDI outflows, which peaked in 2021, boosted by high levels of reinvestement of earnings. Germany, Japan, China and the United Kingdom followed, with more than USD 100 billion outflows in 2021.
- Completed cross-border M&A deals exceeded pre-pandemic levels by 50% in advanced economies and by 25% in emerging and developing economies.
- The rebound in greenfield investment activity was less even, increasing in advanced economies to surpass pre-pandemic levels by 16%, but remaining subdued in emerging and developing economies.
