Global FDI up by 6% in 2020 despite pandemic

• USA tops list being largest recipient of FDI
• UK and Germany take lead in Europe
• FDI increase in Asia Pacific driven by China
• Africa witnesses a contraction due to lower positions in Nigeria

The global foreign direct investment (FDI) position witnessed an expansion of US $ 2.2 trillion in 2020, when compared with 2019, an increase led by Europe and the Asia Pacific region.

The Coordinated Direct Investment Survey (CDIS) of the International Monetary Fund (IMF) revealed that global FDI in 2020 surged by 6 percent from 2019, despite the pandemic.

However, while economic activities across the world became almost stagnant during the COVID-19 outbreak, the IMF said the increase in foreign direct investment positions is largely in line with the average annual increase over the past five years. 

According to the survey, the world’s top 10 recipients of FDI by end-2020 were the United States, Netherlands, Luxembourg, China, the United Kingdom, Hong Kong SAR, Singapore, Switzerland, Ireland and Germany.

 The United States took the top position as the largest recipient of FDI in 2019 and consolidated that position in 2020, with higher direct investments from Japan, Germany and the Netherlands. 

In Europe, the United Kingdom and Germany topped the list, accounting for 18 percent and 15 percent, whereas in the Asia Pacific, the increase was mainly driven by China.

“In fact, China showed the largest reported increase in both inward and outward direct investment worldwide,” the IMF said in its survey findings. Meanwhile, Africa witnessed a fall in its FDI in 2020, when compared with 2019, due to lower positions in Nigeria. The CDIS highlighted that low-tax jurisdictions such as the Netherlands, Luxembourg, Hong Kong SAR, Singapore and Ireland, remained among the top direct investors and investee economies.   “They continued to be attractive destinations for different types of investments, including those channelled through special purpose entities,” the IMF said in its survey findings.   The CDIS is the only worldwide survey of FDI positions, conducted annually by the IMF. The database presents detailed data on bilateral direct investment relations among economies.