Global investment activity fell by nearly a third in the second quarter of 2013, after two consecutive quarters of increases, according to new OECD data. This marks a return to the steady downward trend that started in Q1 of 2012, says the report, with international investors pulling more money out than they invested.
Unlike earlier stages of the global economic crisis, when emerging economies played a counter-cyclical role in international investment flows, the declines in Q2 were across the board. Outward investment from OECD economies declined by 20% to USD155 billion and inward investment into the OECD declined by 26% to USD137 billion.
Investment by non-OECD G20 countries fell by 92%, from USD 82 billion to USD 6.5 billion. This was mainly due to the collapse in international investment from Russia, from USD 54 billion in Q1 to USD -1 billion international divestment in Q2. Russia recorded its highest levels of investment outflows in Q1, largely a result of the TNK-BP Rosneft deal, involving the Virgin Islands.
Three countries received 47% of global FDI inflows in Q2 2013: China attracted the lion's share (USD 61 billion, or 21% of total) followed by the United Kingdom (USD 41 billion) and the United States (USD 38 billion). As with outflows, the decrease in inflows is largely due to divestments in OECD countries. The declines in inflows to Canada (41% decrease, to USD 11 billion) and Spain (48% decrease, to USD 6 billion) were particularly large.
Not all countries experienced declines. FDI inflows increased for Australia (from USD 10 billion to USD 12 billion), the United Kingdom (from USD 34 billion to USD 41 billion), and the United States (from USD 29 billion to USD 38 billion). Mexico recorded its highest level of investment inflows (from 5 billion to USD 18 billion), boosted by Belgian-based beer giant Anheuser-Busch InBev's acquisition of Grupo Modelo.
The full report is available in PDF at www.oecd.org/daf/inv/investment-policy/FDIinFiguresOctober2013.pdf
Data can be downloaded in Excel at www.oecd.org/daf/inv/TablesofFDIstatistics_master.xls