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OECD reports on FDI flows in the time of COVID-19

Friday, May 08, 2020
Opalesque Industry Update - COVID-19 has provoked a global health crisis and severe economic disruptions. This is also impacting the foreign direct investment (FDI) decisions of firms. What is this likely to mean for FDI flows in 2020?

According to the latest report from the OECD:

- FDI flows are expected to fall by more than 30% in 2020 even under the most optimistic scenario for the success of the public health and economic support policy measures taken by governments to address the COVID-19 pandemic and the resulting recession.

- FDI flows to developing countries are expected to drop even more because sectors that have been severely impacted by the pandemic, including the primary and manufacturing sectors, account for a larger share of their FDI than in developed economies.

- FDI could play an important role in supporting economies during and after the crisis through financial support to their affiliates, assisting governments in addressing the pandemic, and through linkages with local firms.

- FDI flows have steadily declined over the past five years, and they could remain below pre-crisis levels throughout 2021 if the public health measures and economic support policies are not effective.


Full report here:

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