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Global FDI flows for 2014 have stalled at levels substantially below the peak levels reached before the financial crisis and ensuing global recession that began in 2008 according to preliminary estimates in the December 2014 issue of FDI in Figures.
The experiences of different countries and regions have varied tremendously since the financial crisis. For example, EU inflows and outflows are about three-fourths lower than their pre-crisis peaks in 2007. In contrast, US inflows are down about one quarter from their 2008 peak, and US outflows are down about one sixth from their 2007 peak. At the same time, China’s role as both a destination and a source of FDI has continued to grow. Since the beginning of the crisis, China’s FDI inflows have increased by about half, and their outflows are up about one quarter, albeit from very low levels.
It appears that these country and regional trends have largely continued into 2014, with some evidence of weakening in outward investment for all three. For the EU, outward investment was very low in the first quarter of 2014, at USD 6 billion. However, outward investment was only USD 20 billion in the second quarter. This compares to outward investment of about USD 92 billion in the 3rd and 4th quarters of 2013. On the other hand, inward flows appear to have picked up. In the first half of 2014, inward investment in the EU was USD 152 billion compared to USD 114 billion in the first half of 2013 and USD 95 billion in the second half of 2013.
For the United States, outward FDI flows through the first half of 2014 were USD 143 billion, down slightly from USD 157 billion in the second half of 2013 and down much more from USD 193 billion in the first half of 2013. The United States recorded negative inward investment, or disinvestment, in the 1st quarter of 2014, but in the 2nd quarter of 2014, inward investment was USD 64 billion.
For China, outward investment was USD 31 billion in the first half of 2014, down from USD 36 billion in the second half of 2013 and USD 37 billion in the first half of 2013. Inward investment was USD 124 billion in the first half of 2014, down from USD 144 billion in the second half of 2013 but up from USD 115 billion in the first half of 2013.
According to the review, it is likely that the United States, Germany, Japan, Switzerland, and China were the top sources of direct investment in the second quarter of 2014, and it is likely that the United States, China, the United Kingdom, Brazil, and Canada were the top destinations for direct investment.
OECD FDI in Figures (December 2014)