Global foreign direct investment (FDI) in 2013 is likely to remain close to the level of 2012 at about USD 1.45 trillion, UNCTAD said in its global investment report.

“UNCTAD forecasts FDI in 2013 to remain close to the 2012 level, with an upper range of USD 1.45 trillion…FDI inflows may then climb to USD 1.6 trillion in 2014 and USD 1.8 trillion in 2015,” said the World Investment Report 2013 subtitled ‘Global Value Chains: Investment and Trade for Development’. The global FDI inflows fell by 18 per cent to USD 1.35 trillion in 2012, it said on Wednesday.

As macroeconomic conditions improve and investors regain confidence in the medium term, transnational corporations (TNCs) may convert their record levels of cash holdings into new investments, the report said.

“Recovery to more vigorous investment levels will take longer than expected, mostly because of global economic fragility and policy uncertainty,” it said.

Further, the report warned that factors such as structural weaknesses in the global financial system, the possible deterioration of the macroeconomic environment, and significant policy uncertainty in areas crucial for investor confidence might lead to a further decline in FDI inflows.

According to the report, developing countries took the lead in attracting FDI in 2012.

“For the first time ever, developing economies absorbed more FDI than developed countries, accounting for 52 per cent of global FDI flows.”

The report said FDI inflows to developing economies, however, declined slightly by 4 percent to USD 703 billion.

And among developing regions, flows to Asia and to Latin America and the Caribbean remained at historically high levels, but their growth momentum weakened.

“Africa saw a year-on-year increase in FDI inflows in 2012. FDI is also on the rise in structurally weak economies – comprising the least developed countries, landlocked developing countries, and small island developing states,” it added.

It said developing economies’ FDI outflows stood at USD 426 billion, a record 31 percent of world total and developing Asia was the largest source of FDI, accounting for three quarters of the developing-country total.

On inflows, the report said FDI declined by 32 percent to USD 561 billion, the level last seen almost 10 years ago.

At the same time, FDI outflows from developed countries dropped to a level close to the trough of 2009.