Untied Nations Conference for Trade and Development (UNCTAD) on Thursday predicted a 27 per cent drop in foreign direct investment (FDI) inflows worldwide at $534 billion, although it would go up in countries like China and India.
‘‘World FDI inflows will decline in 2002 by 27 per cent to about $534 billion …. overall, more than half of the 85 economies for which data are available can be expected to receive lower FDI flows in 2002 than in 2001,’’ the preliminary estimates released by UNCTAD said on Thursday.
The decline in FDI inflows would be more pronounced at about 31 per cent in developed nations while it would fall by 23 per cent in developing nations and by one per cent each in central and eastern Europe, it said. Although FDI inflows in developing nations of Asia are expected to decline by 12 per cent to $90 billion in 2002, UNCTAD said it would go up in China and India.
‘‘Overall, the possibly drastic decline in FDI in most of the region’s economies is unlikely to be offset by an increase in such economies as China, India, Malaysia and Philippines’’, it said. China, which is likely to attract $50 billion fdi in 2002, may for the first time overtake us to become the largest fdi host country, the report said.
UNCTAD noted that US and European trans national companies are expected to invest less in Asia this year resulting in an overall fall in FDI inflow in the region.