A blow to global investment in developed countries during 2023

The Information and Decision Support Center of the Council of Ministers issued a new analysis in which it sheds light on the reality and prospects of global investment in light of the continuation of the Russian-Ukrainian crisis that erupted since February 2022, in addition to reviewing the reality of investment in Egypt in light of the global situation.

Foreign investment

The Information Center indicated that foreign direct investments have played a major role in the economic growth of most countries of the world over the past years. Many countries sought to take all measures and change their fiscal and monetary policies to attract foreign investments.

He explained that the global environment for international investment significantly increased with the outbreak of the Russian-Ukrainian crisis, which occurred at a time when the world was still suffering from the impact of the Corona virus pandemic, and the crisis left effects that extended to all parts of the world. As it caused disturbances in trade and investment in the whole world; As well as affecting global food and fuel consumers.

Raise interest rates

The Center added in its analysis that, according to the World Bank, the Russian-Ukrainian crisis came at a difficult moment for the global economy. As the world was witnessing a slowdown in recovery from the recession caused by the “Covid-19” pandemic, with the emergence of new variables, and the increasing inflation prompted the Federal Reserve and other major central banks to raise interest rates at unprecedented levels, and against the background of the outbreak of the Russian-Ukrainian crisis, the inability to Investors' certainty and avoidance of risk put pressure on international foreign direct investment.

Global investment for 2023

The food and fuel crises and the financial crisis resulting from the Russian-Ukrainian crisis also dampened the business climate. Although foreign direct international investment recovered and returned in 2021 to pre-pandemic levels, reaching about $1.6 trillion, it declined in 2022.

Investing in sustainable energy for all

The World Investment Report 2023, entitled: “Investing in Sustainable Energy for All”, issued by the UNCTAD Foundation “United Nations Conference on Trade and Development” during the month of July 2023, indicated that global investment decreased by 12% on an annual basis in 2022 to reach 1.3 trillion. USD, mainly due to interconnected global crises, the Russian-Ukrainian crisis, rising food and energy prices, and growing public debt.

This decline occurred mostly in advanced economies; As foreign direct investment decreased by 37% to reach 378 billion US dollars in 2022, while flows to developing countries increased by 4% to reach 916 billion US dollars, albeit unevenly. A few large emerging countries attracted most of the investment, while flows to less developed countries declined.

Foundational investment projects

But on the positive side, seed investment project announcements rose 15% year-on-year in 2022, growing in most regions and sectors. Investing in sectors of the digital economy. International investment in renewable energy generation, including solar and wind energy, continued to grow, but at a slower rate of 8% than the 50% growth recorded in 2021. It should be noted that the announced projects in the field of battery manufacturing have tripled, reaching more than $100 billion in 2022.