The United Nations Conference on Trade and Development (UNCTAD) has projected that Foreign Direct Investment flows are likely to drop by 30 to 40 per cent this year and also the coming year. The coronavirus impact on the world economy was severe that could impact the Foreign Direct Investment.
The UNCTAD said this in its latest Investment Trends Monitor report. With the virus not contained till now and several countries still in lockdown, the UN Body says that it is great shock.
The UN said that the decline depends on the severity and duration of the pandemic in various regions and the containment measures that Governments are forced to put into place. It said that foreign direct investment trends show a rapid deterioration of prospects.
Earlier 57 per cent of the companies warned about the pandemic upsetting their supply chains. But now the companies said that it would drag down sales also, the UN Body said.
The UNCTAD said that the worst hit sectors are energy, auto, airlines and basic materials industries. Moreover, it said that the other sectors are also expected to feel the same.
The UN Body said that the downward revisions of earnings are serious in developed countries. Moreover, it also said that profit guidance of multinational companies in developed countries was showing a revised downward trend by 35 per cent after the pandemic started.
