Foreign direct investment flows hit by the crisis

Foreign direct investment flows hit by the crisis

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Publié par

EUROPEAN-COMMISSION-EUROSTAT

Nombre de lectures

41

Langue

English

Economy and finance
Target audience: Specialised/Technical

Publié par

EUROPEAN-COMMISSION-EUROSTAT

Langue

English

Foreign direct investment Recession

Statistics in focus

Economy and finance

Authors: Elsa GONCALVES, Arja KARKKAINEN

29/2010

Foreign direct investment flows hit by the crisis

EU Foreign Direct Investment (FDI) flows have

been severely affected by the global economic

and financial crisis. They hit a record peak in

2007, but dropped sharply in 2008, for both

inward and outward FDI flows (34

% for

outflows, 52

% for inflows).

While incoming FDI

flows recovered slightly in 2009, EU investments

abroad continued to decline (by 24

%).

This publication gives an overview of EU FDI

statistics for stocks at year-end, annual flows

and income. The analysis mainly covers 2006 to

2008, but in the case of flows, provisional data

for 2009 are included, based on annualised

quarterly data.

In 2007, EU foreign direct investment flows to the

countries outside the European Union had reached

the record level of EUR 530.7 bn, mainly as a

result of major cross-border mergers and

acquisitions and reinvestment of earnings. In 2008,

the reinvested earnings paid to extra-EU investors

dropped by 50

% and continued to decline in 2009.

Equity capital — mainly mergers and acquisitions

activity — showed a similar trend, dropping by one

third in 2008 and continuing to go down, resulting

in EUR 263.3 bn EU outward investments in total

in 2009.

Income from investments abroad has also declined

from the record level of 2007, meaning that the rate

of return on EU outward stocks fell to its lowest

level since 2004.

Figure 1: EU FDI flows and stocks 2004-2009

EUR billion

0

500

1000

1500

2000

2500

3000

3500

2004

2005

2006

2007

2008

2009p

stocks

0

100

200

300

400

500

600

flows

Extra EU outw ard stocks

Extra EU inw ard stocks

EU outflow s to Extra EU

EU inflow s from Extra EU

Source: Eurostat (

bop_fdi_main

)