WASHINGTON (Pakistan Point News / Sputnik - 16th October, 2018) Global foreign direct investment declined by more than 40 percent in the first half of the year mainly due to US tax policies, the UN Conference on Trade and Development (UNCTAD) said in a statement.
"Global foreign direct investment fell by 41 % in the first half of 2018 - mainly due to large repatriations by the United States parent companies of accumulated foreign earnings from their affiliates abroad following tax reforms," UNCTAD said via Twitter on Monday.
In a press release, the UN trade agency said the recent tax reforms in the United States encouraged big firms to bring home earnings from abroad, mostly from Western European countries.
UNCTAD Division on Investment and Enterprise Director James Zhan said in the release that another negative factor contributing to the decline of foreign direct investment is the tit-for-tat tariffs imposed by the United States and China.
The fall in foreign direct investment mostly occurred in richer countries, such as Ireland and Switzerland, which dropped $81 billion and $77 billion, respectively, the release said.
However, developing economies saw foreign direct investment flows declining only slightly, by 4 percent, in the first half of this year, the release said.
Foreign direct investment is important because it gives countries access to external capital, technology, market access and tax contributions, the release said.
