Highlights
- Global foreign direct investment (FDI) flows in the first half of 2019 were 24 % higher than in the first half of 2018. However, the underlying FDI trend (removing the effects of one-off transactions and intra-firm financial flows, including repatriations driven by the 2017 US tax reforms) was up only 4%.
- The difference is mostly the result of negative flows in few jurisdictions hosting large stocks of retained earnings of United States multinationals (MNEs). The 2017 US tax reforms have led to such stocks being wound down significant!y(with repatriations causing a one-time negative effect on flows).
- The percentage increase in FDI in 2019H1, to US$640 billion, appears sizeable because flows were unusually low in 2018H1, at US$517 billion. However, they were down by about the same percentage compared to the second half of 2018 and remained below the average of the past ten years.
