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Businesses around the world are scaling back foreign investments because of rising interest rates, lingering fears of new COVID outbreaks, and uncertainties over Russia’s war in Ukraine, the United Nations Conference on Trade and Development said in its annual report on global capital flows.
Figures from this year’s first quarter show investment in new facilities to be down by more than 20 percent from a year earlier, the agency said, to $1.58 trillion.
Foreign investment bounced back sharply in 2020 after cratering the year before as the COVID virus shut down the world’s economy.
TREND FORECAST: Businesses will be reluctant to invest for growth until the Ukraine war is settled and interest rates stabilize. The reduced amount of investment will keep economic growth lower around the world, sharpening the prospects for recession and Dragflation, our Top 2022 Trend that combines rising prices and economic contraction.