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Investment Monitor: FDI Forecasts & Trends To Watch In 2023 - Asian Countries Continue To Benefit

Greenfield FDI is expected to decline in 2023 after growing yet again in 2022. The economic turmoil of 2022 will finally begin to impact FDI levels, especially in H1 2023, but can countries recover quickly? By Glenn Barklie, Chief Economist, Investment Monitor


Key FDI forecasts include:

  • Global inflation will begin to improve but will impact FDI levels in the first half of 2023.

  • The ongoing war in Ukraine will continue to present global economic pressures.

  • Economic conditions will cause several countries to enter a recession, which will negatively impact FDI.

  • The rebalancing of trade and investment partners will become clearer in 2023 – friendshoring, energy redistribution, restructuring of Russian operations and the tech industry will be major themes.

  • Asian countries will continue to benefit from China’s decline in inward FDI.

  • Countries with high economic growth expectations in 2023 will be hoping to convert to increased FDI levels.


China’s loss is other Asian countries' gain

China’s FDI decline in 2022 is notable. Increased production costs, supply chain issues, overreliance risk, Covid-19 lockdowns and geopolitical tensions are key reasons behind this fall. Provisional data from our FDI Projects Database indicates the number of FDI projects into China will fall by 10–15% in 2022. Although this may recover slightly in 2023, particularly in the second half of the year, investors are more likely to continue to invest in neighbouring countries. Our analysis suggests the number of FDI projects into Asia increased in 2022 and passed pre-Covid levels for the first time.


India will record its highest-ever number of FDI projects in 2022 and will rank as the third-largest destination country in the world. The Philippines, Malaysia, Vietnam and Taiwan will also post significant increases in FDI. Furthermore, the majority of Asian countries will experience upturns.


With positive economic growth expected in Asia in 2023 and China’s continued economic pressures, the 2022 data could be indicative of a new rebalancing of FDI in the region.

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