06 MAY,2019 | MEDC
A report by the OECD shows that global FDI flows decreased by 27% in 2018. The report attributes it to the short-term consequences of tax reform in the USA which made American companies bring home large sums of money that were held with foreign affiliates. At just 1.3% of global GDP, the FDI flows of $ 1.1 trillion in 2018 were at the lowest levels since 1999. China also recorded a decrease in FDI outflow for the second consecutive year. The US-China trade war is impacting markets adversely and forcing them to adapt to distorted political realities rather than align in an economically rational direction. With uncertainty in the global economy remaining high due to the ongoing trade tensions, global FDI is likely to continue its downward trend in the coming years.
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