As reported in the World Investment Report 2012 (UNCTAD,
2012), UNCTAD projects that the recovery of FDI flows in 2012 is likely
to be marginal. FDI flows are expected to come in between $1.5 trillion
and $1.7 trillion, with a midpoint at about $1.6 trillion. In the medium
term, however, FDI flows are expected to increase at a moderate but
steady pace, reaching $1.8 trillion in 2013 and $1.9 trillion in 2014. This
baseline scenario, however, does not take into account the potential
for negative macroeconomic shocks. It is also possible that the fragility
of the world economy, the volatility of the business environment,
uncertainties related to the sovereign debt crisis and apparent signs
of lower economic growth in major emerging-market economies will
negatively impact FDI flows in the medium term, including causing
them to decline in absolute terms. Results from the World Investment
Prospects Survey 2012–2014 (WIPS) support the results of UNCTAD’s
baseline forecast, but also highlight the relatively high level of investor
uncertainty associated with the current global economic situation.