According to the latest UNCTAD report the value of global FDI declined in 2012 by almost one fifth. According to the latest UNCTAD report shows that the value of global FDI declined in 2012 by almost one fifth. The largest drop occurred in developed countries, mainly in the EU (about two thirds decline in the world). It has been reported in 22 of 38 developed economies, including the 16 European countries. FDI in this group of countries has fallen by 32%, to their lowest level in nearly 10 years (USD 0.56 billion).
The crisis reached almost all sectors of the economy. The smallest declines have affected manufacturing industries (foodstuffs, tobacco, pharmaceutical), and business services sector, communications, transportation and logistics.
From the investment agencies point of view the important news is that in the long-term the most severe source of FDI are reinvestments. Profits from existing investments in 2012 amounted to about 1.5 billion USD and approximately one third of them remained in the country of investment. The average rate of return on FDI is currently around 7% globally and 5% in developed countries.
In field of obtaining FDI lead developing countries, attracting about 52% of global FDI. They are also responsible for about one third of investment outflow, and in this field they reinforce.
According to the UNCTAD, the value of global FDI in Poland declined in 2012 by 82%. This result was heavily influenced by the scale of capital in transit*, which in 2012 grew in the world seven times. Without taking into account the capital in transit, Polish FDI in 2012 would show significant effects of the crisis, but would not be at such a low level.
The UNCTAD report shows that on a global scale the value of greenfield projects dropped in 2012 by one third. In Poland, which was placed second in terms of new projects of this kind in the entire European Union, this value decreased only by 7.6% to USD 11.5 billion. Data on greenfields show that while the average size of projects has decreased, the investors’ interest in Poland and ability to generate new jobs are high. These data are declarations of investors – therefore constitute an excellent prognosis for investment flows in 2013 and 2014.
In the annual survey by UNCTAD questioning investors about the most attractive countries to invest in the years 2013-2015, Poland was ranked fourth in Europe and the fourteenth in the world.
* Capital in transit are transactions of so-called special purpose entities, which at the request of the mother company due to tax optimization, make transfers of funds by some countries.
Source: PAIiIZ