FDI accounts for 39pc of external finance for developing nations

FE Online Report | Published: June 18, 2018 16:21:52 | Updated: June 18, 2018 20:41:09


Foreign direct investment (FDI) accounted for 39 per cent of external finance on average for the developing nations between 2013 and 2017.

World Investment Report (WIR) 2018 unveiled the estimation.  United Nations Conference on Trade and Development (UNCTAD) published the report in the first week of June this year.

“FDI has been the largest source of external finance for developing economies over the past decade, and the most resilient to economic and financial shocks,” said the report.

“The growth of ODA has stagnated over the past decade. It amounts to about a quarter of FDI inflows to developing economies as a group,” it added.

It also showed that for the Least Developed Countries (LDCs), external foreign assistance, Overseas Development Assistance (ODA) to be precise, is the most significant source of external finance.

ODA accounted for 36 per cent of external finance for the LDCs during the five-year period mentioned above while ratio of FDI stood at 21 per cent.

Remittance accounted for 28 per cent of the external finance for the LDCs during the period under review while it was 24 per cent for the developing economies.

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