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BRICS now account for over one fifth of global FDI with China gaining the 2nd spot, Russia 3rd and Brazil 7th in the list of top 20 host economies of 2013.
The current share of global FDI inflows to BRICS is at 22 per cent which is twice that of their pre-crisis level, according to the UN Conference on Trade and Development (UNCTAD) report.
Total inflow to BRICS reached $322 billion in 2013, up 21 per cent from 2012.
South Africa outperformed other countries within BRICS, with FDI inflows rising by 126%.
“With inflows to China at an estimated US$127 billion – including both financial and non-financial sectors – the country again ranked second in the world, closing the gap with the United States to some $32 billion,” said the report.
“FDI inflows to the Russian Federation jumped by 83% to US$94 billion making it the world’s third largest recipient of FDI for the first time ever,” added the report.
The rise was predominantly ascribed to the large acquisition by BP (United Kingdom) of 18.5% of Rosneft (Russia Federation) as part of Rosneft’s US$57 billion acquisition of TNK-BP.
India ranked 16th among the top 20 global economies, receiving the maximum FDI, with Asia regaining the top spot as the “largest host region”.
FDI inflows into India grew 17 per cent to $28 billion in 2013 despite unexpected capital outflows in the middle of the year, according to the report.
FDI to Brazil – the largest recipient of FDI in the sub-region of CELAC stood at $63 billion in 2013.
Global FDI increased by 11 per cent to an estimated $1.46 trillion in 2013, with the lion’s share going to developing countries.
FDI inflows into developing economies reached a new high of $759 billion, accounting for 52 per cent, during the year. Developed countries, however, are “trapped in a historically low share” (39 per cent) for the second consecutive year.
UNCTAD forecasts that global FDI inflows will gradually rise to $1.6 trillion and $1.8 trillion in 2014 and 2015, respectively.
As global economic growth gains momentum, this may prompt investors to turn their cash holdings into new investments, it said.
However, uneven levels of growth, fragility and unpredictability in a number of economies and risks related to the tapering of quantitative easing could dampen the FDI recovery.
FDI inflows into developed countries increased 12 per cent to $576 billion, with such investments into the European Union increasing, while flows to the United States continued their decline. The US received $159 billion in FDI inflows last year.