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Global foreign direct investment remained flat in 2003 - UN

Global foreign direct investment remained flat in 2003 - UN

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After dropping for two years, foreign direct investment (FDI) in 2003 remained flat at $653 billion, but should rebound in 2005, the United Nations' think tank on global financial flows and economic development said today.

The UN Conference on Trade and Development (UNCTAD) said investment inflow figures for all countries were $651 billion in 2002 and $824 billion in 2001, down from $1.4 trillion in 2000.

"The continuing low value and number of cross-border mergers and acquisitions (M&As) - the key driver of global FDI flows since the late 1980s - contributed heavily to the downturn," the Geneva-based agency said in a summary of an upcoming report.

UNCTAD predicted, however, that FDI flows would rebound next year, boosted by the improving global economy, higher corporate profitability, recovering M&A transactions and growing investor confidence.

For the United States, the figures dropped from $144 billion in 2001 to $30 billion in 2002, but rose to $86.6 billion last year. Among other developed regions, the European Union declined from $389.4 billion in 2001, to $374.4 in 2002 and $341.8 in 2003.

Developing countries attracted 209.4 billion in 2001, $162.1 billion in 2002 and $155.7 billion in 2003. Most of this FDI went to the Asian and Pacific countries, where the figures were $106.9 for 2001, $95.1 billion in 2002 and $99 billion in 2003. China set a new record for itself, pulling in $57 billion in 2003, UNCTAD reported.

Further information on global FDI trends will be released in the World Economic Situation and Prospects 2004, to be issued by the UN later this week.

Government trade ministers come together every four years to set UNCTAD's priorities and guidelines for action. This year's session, known as UNCTAD XI, the 11th ministerial-level meeting, will be held in Sao Paulo, Brazil, from 13 to 18 June.