In addition to their regular economic forecasts, our country panellists are occasionally asked to provide projections for net foreign direct investment inflows (FDI) for the current and next year. We undertake special surveys of FDI inflows across our publications Asia Pacific Consensus Forecasts, Latin American Consensus Forecasts and Eastern Europe Consensus Forecasts and the resulting tables and analysis are displayed in both the hard copy and PDF versions of the publications.
The Consensus Forecasts™, representing averages of our individual country panellists’ projections, were used to calculate estimates of FDI in relation to country size, i.e. as a share of nominal GDP, and population. The table below shows a small portion of the data from one of our surveys of forecasts Foreign Direct Investment (in this case, from our November 2020 Asia Pacific Consensus Forecasts survey).
Foreign Direct Investment (FDI), i.e. investment in one country by the residents of another, includes equity transactions, reinvested earnings and various inter-company capital transactions. FDI is generally considered to be more motivated by longer term considerations than portfolio investment in tradable securities. FDI data is recorded in the financial account of the balance of payments, but cross-country comparisons can often be complicated by the different statistical methods used for compilation and the exchange rate chosen for converting local currency into US dollars. 2020 has proved to be a tumultuous year in the wake of the Covid-19 pandemic. The slump in output, the loss in confidence and the huge uncertainty attached to the global outlook, among other factors, have all weighed on investment. It is no surprise that FDI inflows into one of the world’s most dynamic regions are expected to suffer as a result. As economic activity recovers next year, foreign investment inflows into Asia are poised to rebound, however.
A portion of the text from Asia Pacific Consensus Forecasts, November 9, 2020.