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FDI projected to contract by at least 30% due to Covid-19

By Paul Dennis

10 July

The Covid-19 pandemic has undone years of economic globalisation as foreign direct investments have been disrupted like never before.

Developing countries are the most affected as foreign direct investment (FDI) inflows are expected to drop below the global average.

As the recovery from the pandemic prolongs and FDI inflows drop, developing countries are expected to lose export revenues consequently impact employment opportunities.

Stephany Griffith-Jones, an economist, shared an article on how the Covid-19 pandemic is impacting the flow of global FDI.

The article notes that developing countries are expected to be the worst affected due to this disruption of FDI.

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The pandemic led to a capital outflow of $83bn in late March from developing countries, which is the largest ever recorded.

Further, global FDI flows are projected to contract by 30%-%40 between 2020 and 2021.

All sectors are expected to be affected particularly airlines, leisure, and restaurants.

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