Global foreign direct investment (FDI) is expected to fall 30 to 40 per cent during 2020-21 due to restrictions put in place to fight the spread of coronavirus, according to a new report from the United Nations.
“The outbreak and spread of coronavirus (Covid-19) will cause a dramatic drop in global foreign direct investment flows,” the United Nations Conference on Trade and Development (UNCTAD) said on Thursday.
“Since our first special issue on the impact of the pandemic, updated economic impact estimates and earnings revisions of the largest multinational enterprises (MNEs) now suggest that the downward pressure on FDI could be 30 per cent to 40 per cent during 2020-2021.”
Energy and basic material industries, airlines and the automotive industry are expected to suffer the most with FDI plunging by 208 per cent in the energy and basic materials sector, 116 per cent in airlines and 47 per cent in the automotive sector.
The UN agency in an earlier report this month predicted a global drop of 15 per cent in FDI due to the coronavirus. It revised numbers upwards due to the rapid spread of the disease across the globe.
“Earnings guidance by multinational enterprises in UNCTAD’s Top 100, a bellwether of FDI trends, confirms the rapid deterioration of prospects,” it said, adding 61 per cent of MNEs have issued statements about disruption since the first week of March.
“In addition to earlier concerns on production and supply chain disruptions among firms with strong supply chain links to China, 57 per cent of MNEs have added warnings on the impact on sales of the global demand shock caused by the pandemic. Covid-19 is no longer just a global value chain (GVC) problem.”
The latest assessment from the UNCTAD comes as coronavirus cases rise globally with over 460,000 infections and more than 22,000 deaths, according to Johns Hopkins University as of Thursday. Nearly 114,000 people have recovered.
The report noted the pandemic and the mitigation measures that governments are forced to impose are affecting all components of FDI.
“Real capital expenditure, greenfield investments and expansions are being hampered by physical closures of sites and production slowdowns. Cross-border M&As (mergers and acquisitions) are being delayed and new M&A announcements are on course to drop by 70 per cent globally in the first quarter.”
Cross-border M&A transactions worldwide averaged 1,200 deals per month in 2019, but only 874 deals were recorded in February and just 385 until March 20.
“They would be on course for a 50 per cent decrease in March, and at this clip a 70 per cent decline from last year’s levels next month.”
UNCTAD also said the decline in FDI will depend on the severity and duration of the pandemic across different regions and countries, and the scope of the containment measures that governments are forced to put in place.
“Importantly, it will also depend on the nature and scale of policy packages that most governments are now putting together to support their economies, which will determine the duration of the recession and the speed of recovery.”
“Most of these packages are expected to include investment support measures, such as accelerated depreciation of post-pandemic capital expenditures (especially in Asia, where a larger proportion of GDP is tied to investment demand).”
Governments across the world are announcing different packages to boost the economy. The US Senate this week unanimously approved a $2 trillion (Dh7.3tn) rescue plan, the largest in the country's history, to help soften the impact of the coronavirus pandemic on the world's largest economy.
In the region, the UAE government increased its stimulus package to Dh126 billion to support the economy and help small businesses whereas Saudi Arabia, the biggest economy in the Arab world, has also announced 120bn riyals (Dh117.3bn) worth of initiatives to mitigate the impact of the coronavirus outbreak on its economy.
Day 1, Dubai Test: At a glance
Moment of the day Sadeera Samarawickrama set pulses racing with his strokeplay on his introduction to Test cricket. It reached a feverish peak when he stepped down the wicket and launched Yasir Shah, who many regard as the world’s leading spinner, back over his head for six. No matter that he was out soon after: it felt as though the future had arrived.
Stat of the day - 5 The last time Sri Lanka played a Test in Dubai – they won here in 2013 – they had four players in their XI who were known as wicketkeepers. This time they have gone one better. Each of Dinesh Chandimal, Kaushal Silva, Samarawickrama, Kusal Mendis, and Niroshan Dickwella – the nominated gloveman here – can keep wicket.
The verdict Sri Lanka want to make history by becoming the first team to beat Pakistan in a full Test series in the UAE. They could not have made a better start, first by winning the toss, then by scoring freely on an easy-paced pitch. The fact Yasir Shah found some turn on Day 1, too, will have interested their own spin bowlers.
MATCH INFO
New Zealand 176-8 (20 ovs)
England 155 (19.5 ovs)
New Zealand win by 21 runs
START-UPS%20IN%20BATCH%204%20OF%20SANABIL%20500'S%20ACCELERATOR%20PROGRAMME
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The biog
Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
Tickets
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
Abu Dhabi Sustainability Week
Results
57kg quarter-finals
Zakaria Eljamari (UAE) beat Hamed Al Matari (YEM) by points 3-0.
60kg quarter-finals
Ibrahim Bilal (UAE) beat Hyan Aljmyah (SYR) RSC round 2.
63.5kg quarter-finals
Nouredine Samir (UAE) beat Shamlan A Othman (KUW) by points 3-0.
67kg quarter-finals
Mohammed Mardi (UAE) beat Ahmad Ondash (LBN) by points 2-1.
71kg quarter-finals
Ahmad Bahman (UAE) defeated Lalthasanga Lelhchhun (IND) by points 3-0.
Amine El Moatassime (UAE) beat Seyed Kaveh Safakhaneh (IRI) by points 3-0.
81kg quarter-finals
Ilyass Habibali (UAE) beat Ahmad Hilal (PLE) by points 3-0
The biog
Hobbies: Salsa dancing “It's in my blood” and listening to music in different languages
Favourite place to travel to: “Thailand, as it's gorgeous, food is delicious, their massages are to die for!”
Favourite food: “I'm a vegetarian, so I can't get enough of salad.”
Favourite film: “I love watching documentaries, and am fascinated by nature, animals, human anatomy. I love watching to learn!”
Best spot in the UAE: “I fell in love with Fujairah and anywhere outside the big cities, where I can get some peace and get a break from the busy lifestyle”
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Walls
Louis Tomlinson
3 out of 5 stars
(Syco Music/Arista Records)
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Naga
%3Cp%3E%3Cstrong%3EDirector%3A%C2%A0%3C%2Fstrong%3EMeshal%20Al%20Jaser%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3EAdwa%20Bader%2C%20Yazeed%20Almajyul%2C%20Khalid%20Bin%20Shaddad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
Second Test, Day 2:
South Africa 335 & 75/1 (22.0 ov)
England 205
South Africa lead by 205 runs with 9 wickets remaining
Scoreline
Swansea 2
Grimes 20' (pen), Celina, 29'
Man City 3
Silva 69', Nordfeldt 78' (og), Aguero 88'
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
How they line up for Sunday's Australian Grand Prix
1 Lewis Hamilton, Mercedes
2 Kimi Raikkonen, Ferrari
3 Sebastian Vettel, Ferrari
4 Max Verstappen, Red Bull
5 Kevin Magnussen, Haas
6 Romain Grosjean, Haas
7 Nico Hulkenberg, Renault
*8 Daniel Ricciardo, Red Bull
9 Carlos Sainz, Renault
10 Valtteri Bottas, Mercedes
11 Fernando Alonso, McLaren
12 Stoffel Vandoorne, McLaren
13 Sergio Perez, Force India
14 Lance Stroll, Williams
15 Esteban Ocon, Force India
16 Brendon Hartley, Toro Rosso
17 Marcus Ericsson, Sauber
18 Charles Leclerc, Sauber
19 Sergey Sirotkin, Williams
20 Pierre Gasly, Toro Rosso
* Daniel Ricciardo qualified fifth but had a three-place grid penalty for speeding in red flag conditions during practice
The Lowdown
Kesari
Rating: 2.5/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Anubhav Singh
Cast: Akshay Kumar, Parineeti Chopra
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test Thursday-Monday at Colombo
- 3rd Test August 12-16 at Pallekele
