Global FDI hits $727bn in H1 2023, but remains below 2022 levels

Global FDI flows rebounded to $727 billion in the first half of 2023, but remained 30% below the levels recorded in the first half of 2022, according to figures released by the OECD in October 2023.

Much of the increase came in the first quarter of 2023, whereas global FDI flows dropped by 44% in Q2 2023, compared with the previous quarter.

FDI inflows to the OECD area increased to $275 billion, yet they were 42% below their levels recorded in the first half of 2022, and below half-year levels in 2021, largely due to lower equity inflows and reinvested earnings, partly reflecting that new investment activity continues to slow.

Outflows from the OECD area more than doubled to $580 billion, compared with the second half of 2022, although they were below previous half-year levels. Here too, much of the increase took place in Q1, whereas FDI outflows from OECD countries dropped by 56% in Q2.

FDI flows into non-OECD G20 economies dropped by 15% in the first half of 2023.
They decreased by 13% in Q1 and by a further 27% in Q2.

Leading FDI recipients

The US was the leading FDI recipient worldwide, followed by Brazil, Canada and Mexico, both equally ranked as third largest FDI recipient. The US was also the major investor worldwide, followed by China and Japan.

Completed cross-border M&A activity continued on a downward trend in the midst of a weakening economic environment, impacted by high prices, increasing interest rates, and ongoing geopolitical uncertainty. The value of completed deals dropped by 23% in advanced economies and by 49% in emerging markets and developing economies.

Capital expenditures of announced greenfield investment projects remained strong in emerging markets and developing economies, partly driven by a large project in renewable energy announced in Mauritania, but the number of announced projects slowed down.