FDI recovery on the way

Good news for shipping and
logistics companies is that
multinational companies are
not shrinking and looking
inward as some commentators
have suggested.
While Global foreign direct
investment (FDI) flows are
expected to drop by 10% or
more from 2015 to between
US$1.5 and US$1.6 trillion
in 2016, a fall of 10-15% from
2015, they are expected to
start recovering in 2017 and
2018, according to estimates
from the latest Unctad Global
Investment Trends Monitor
(GIPA).
FDI flows have been volatile
in recent years, with analysts
warning that this uncertainty
will have its own negative
impact on trade and global
value chains.
But companies surveyed for
the GIPA report said they were
planning to invest – although
the situation is fluid due to
Brexit and other factors.
“Cautiously pessimistic” is
how the GIPA describes global
economic prospects for the
next three years.
Project cargo volumes
should start growing again in
2017 with FDI predicted to
exceed US$1.8 trillion in 2018
– which is still below the precrisis
peak.
GIPA found that about
10% of companies that have
less than 20% of their assets
abroad in 2015 plan to increase
their foreign assets to a share
of between 20 and 50% of
their total assets by 2018.
Similarly, almost 12%
of MNEs (multinational
enterprises) that in 2015
invested less than 20%
abroad “intend to significantly
increase their foreign
expenditures; some even by
more than 50%,” according to
the report.