The Organization for Economic Co-operation and Development (OECD) says global foreign direct investment (FDI) will fall to a 15-year low by 2020 due to the effects of COVIT-19.

According to the Organization for Economic Co-operation and Development (OECD), global foreign direct investment inflows fell to a 15-year low in 2020, and the Govt-19 epidemic hit the global economy.

According to a report by the Paris-based organization, global foreign direct investment fell 38 percent year-on-year to $ 846 billion, the lowest level since 2005, when the epidemic accelerated its steady decline. It represents only 1 percent of world GDP, the lowest level since 1999.

“This decline represents the lowest level of capital inflows in OECD countries since 2005, mainly as a result of major exemptions from Switzerland and the Netherlands, for example, the sale of current interests in companies residing in these two countries by parent companies to the United States and other OECD countries. Significant decline in foreign direct investment. ”

OECD economies contracted by 4.9 percent in 2020, the sharpest decline since 1962, to 0.7 percent in the fourth quarter of GDP. Nearly all countries in the Organization for Economic Co-operation and Development (OECD) were hit by a contraction in production last year, from 3.5 per cent in the US to 9.9 per cent in the UK.

The report said China, one of the few major economies with positive growth over the past year, has overtaken the United States as a major destination for foreign direct investment globally as large parts of the world’s largest economy have been blocked by the epidemic.

China and the United States received $ 212 billion and $ 177 billion in foreign direct investment, respectively.

This was followed by India and Luxembourg as recipients of foreign direct investment, excluding resident special purpose companies.

According to the report, Luxembourg, the United States and Japan were the largest sources of foreign direct investment. The United States was widely stable, but Japan and China recorded a decline in foreign direct investment output in 2020.

The Organization for Economic Co-operation and Development (OECD) has said that the recovery of continued cross-border mergers and acquisitions in advanced economies starting in the second half of 2020 and in the first quarter of 2021 will boost FDI inflows this year.

The report said, “Many companies have moved to international transactions, driven by lower financial costs, the expected fall in purchase prices and a brighter outlook on vaccine availability.” “This will increase foreign direct investment in 2021, unless the major diversions that severely affected foreign direct investment in 2020 continue until 2021.”

Last year, cross-border M&A values ​​were driven by some major deals in specific sectors: more deals were closed in the health and technology sectors in 2020 than in previous years, the report said.

Foreign direct investment inflows into the OECD region fell by 51 percent last year, largely due to exemptions in Switzerland and the Netherlands.

Emissions from the OECD region have fallen to a historically low level of 48 percent since 2005, mainly as a result of the massive withdrawal of companies from the Netherlands.

Foreign direct investment in the non-OECD G20 economies, which include the world’s largest economies, fell by just 9 percent as a result of the recovery in China and India later this year.

Data show that FDI inflows have fallen by 49 percent in some G20 economies that are not members of the Organization for Economic Co-operation and Development.

The Organization for Economic Co-operation and Development last month said that the socio-economic displacement caused by the epidemic would provide an opportunity for governments to reconsider their policies and push their countries on a more sustainable and inclusive path.

The Global Policy Forum, which works with 100 countries around the world, allows leaders to achieve active economic recovery and promote high-quality growth in the face of fundamental challenges facing their countries, such as income inequality and regional economic divisions.

The International Monetary Fund (IMF) has raised its global economic forecast for the second time this year due to rapid vaccination campaigns against Govt-19 and financial and monetary support from governments and central banks, but has warned policymakers about widening income inequality and a random recovery from being rich. . . Countries are rapidly recovering from the epidemic.

The Washington lender said in its latest report on the global economic outlook in April that the global economy is now on the verge of expanding by 6 percent in 2021, compared to its previous estimate of 5.5 percent.