Foreign Investment Climbs Slowly
Foreign investment by businesses will reach its precrisis peak no earlier than 2013, and probably later if there were to be a widespread government-debt crisis, a United Nations agency said on Tuesday.</br></br>The U.N. Conference on Trade and Development said businesses invested $1.24 trillion outside their home countries last year, up 5% from 2009. Based on figures for the first five months of this year, it expects that to rise to between $1.4 trillion and $1.6 trillion this year, $1.7 trillion in 2012 and $1.9 trillion in 2013.</br></br>But Unctad said that rise in foreign direct investment will only happen if a daunting array of pitfalls are sidestepped.</br></br>"Risk factors, such as the unpredictability of global economic governance, a possible widespread sovereign debt crisis, and fiscal and financial sector imbalances in some developed countries, as well as rising inflation and signs of overheating in major emerging market economies, may yet derail the FDI recovery," Unctad said.</br></br>Unctad said that in 2010, the U.S remained the main recipient of foreign direct investment, which rose 49% from 2009, to $228 billion. By contrast, inflows into Europe were down 19% from 2009, with the U.K. suffering a 35% drop to $45.9 billion from $71.1 billion. Overall, flows of investment to developed economies fell slightly, to $602 billion from $603 billion in 2009.