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Global foreign investment inflows may decline by 13%: World Investment Report |
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According to UNCTAD, after five consecutive years of growth, global FDI inflows are projected to decline by nearly 13 per cent in 2008 due to the ongoing financial crisis which began last year.
Since 2003, global FDI inflows had grown consistently, rising to a high of $1.83 trillion in 2007, a 30 per cent increase over the previous year on account of record merger and acquisition (M&A) activity.
However, the Unctad’s latest World Investment Report projects a 12.7 per cent decline in FDI inflows in the whole of the current year to $1.6 trillion. However, FDI flows to developing countries like India are likely to be less affected.
The services sector had accounted for nearly 60 per cent of M&As in 2007, including the $98-billion acquisition of ABN-AMRO by a consortium of Royal Bank of Scotland, Fortis and Santander. To some extent, the record FDI levels also reflected the significant depreciation of the dollar against other major currencies.
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