Ireland bucks trend as foreign investment hits €19bn
IRELAND received 7pc of all the foreign direct investment in the EU last year, as global flows among rich economies slumped 44pc.
Ireland spectacularly bucked the trend after the huge fall in 2008 sparked partly by a tax amnesty for US overseas companies introduced by President Bush.
Inflows of FDI totalled $25bn (€19bn) in 2009, according to the annual report from the United National Conference on Trade and Development (UNCTAD). This was more than half the figure recorded for the UK.
This left Ireland ranked 16th in the world for inflows of FDI. Outward investment came to almost $21bn (€16bn), representing the actions of multi-nationals, takeovers by Irish firms and investments in commercial property.
The report puts the stock of FDI in Ireland at $193bn -- almost matched by $192bn (€149bn) of FDI owed overseas by Irish entities.
The report says a slump in cross-border mergers and acquisitions (M&As) accounts for most of the decline in global FDI last year. "Acquisitions abroad contracted by 34pc (65pc in value), as compared with a 15pc retrenchment in the number of greenfield FDI projects," UNCTAD says.
FDI by private equity funds fell 65pc as the financial crisis took hold. But investment by sovereign (government) wealth funds rose 15pc.
"FDI by private equity funds was affected both by the drop in their fund-raising and by the collapse of the leveraged buyout market. The value of cross-border M&As by private equity funds went down to $106bn (€82bn), or less than a quarter of its 2007 peak value," the report says.