Global FDI skids 19% on US tax reform: UN

 

Global FDI skids 19% on US tax reform: UN
FDI is a bellwether of globalisation and a potential sign of growth of corporate supply chains and future trade ties.

geneva - It was the lowest net global FDI since 2009

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Published: Mon 21 Jan 2019, 7:26 PM

Last updated: Mon 21 Jan 2019, 9:28 PM

Global foreign direct investment (FDI) fell 19 per cent last year to an estimated $1.2 trillion, largely caused by US President Donald Trump's tax reforms, the United Nations trade and development agency UNCTAD said on Monday.

FDI, comprising cross-border mergers and acquisitions (M&A), intra-company loans and investment in startup projects abroad, is a bellwether of globalisation and a potential sign of growth of corporate supply chains and future trade ties.

But it can also go into reverse as companies pull investments out of foreign projects or repatriate earnings.

The lowest net global FDI since 2009 was the result of US firms repatriating $300 billion or more in accumulated earnings to take advantage of Trump's tax break.

Net investment flows into Europe slumped by an unprecedented 73 per cent to $100 billion, a level not seen since the 1990s, as US firms pulled years of profits out of affiliates in Ireland, Switzerland and elsewhere. - Reuters


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