UNITED NATIONS, Jan. 9 (UPI) -- The United Nations estimates foreign direct investment grew in 2006 for the third consecutive year to reach $1.2 trillion.
However, the world organization also Tuesday warned economic growth is likely to slow this year because of high commodity prices and other factors.
"The total is a 34 percent increase from 2005, although still short of the record of $1.4 trillion set in 2000. The continued rise in FDI largely reflects high economic growth and strong economic performance in many parts of the world. Such growth has occurred in both developed and developing countries," said the U.N. Conference on Trade and Development.
"Continuing global external imbalances, sharp exchange rate fluctuations, rising interest rates, and increasing inflationary pressures, as well as high and volatile commodity prices, pose risks that may also hinder global FDI flows and could lead to a slowdown in the fast growth in global FDI registered over the past few years," UNCTAD said.
UNCTAD said FDI inflows last year "varied greatly" among regions and countries, noting, for example, that investment to developed nations rose by 48 percent, well over levels of the previous two years, to reach $800 billion, while inflows to Latin America and the Caribbean slowed. Total FDI in 2005 was $916 billion.
FDI inflows to South, East and Southeast Asia, and Oceania maintained their upward trend in 2006, reaching a new high of $187 billion, an increase of 13 percent over 2005, UNCTAD said, noting in particular the increasing attractiveness for investors of China, Singapore and India.
"Investments in high-tech industries by transnational corporations are growing rapidly, particularly in China. Meanwhile, other countries, including India, are attracting increasing FDI for traditional manufacturing."
