FDI flows into Kazakhstan stood at $12.1B in 2019 first half
In 2018, global foreign direct investment continued to decline for the third year in a row, falling by 13.4% to $1.3T. This was mainly due to the major return of the accumulated overseas profits of US multinational enterprises after the tax reforms carried out in the country at the end of 2017, Ranking.kz reports.
FDI inflows to developed countries reached their lowest level since 2004, 27% down, and investments in Europe halved to less than $200B.
Meanwhile, investments in developing countries increased by 2%, bringing the share of developing countries in global FDI to a record 54%.
In 2018, the highest FDI inflows were observed in the United States ($252B), China ($139B) and Hong Kong ($116B), Singapore ($78B) and the Netherlands ($70B).
Global FDI inflows have continued slowing down in 2019. OECD data indicate global foreign direct investment flows have fallen by 20% in the first half of 2019, to $572B. 1Q of this year saw the global FDI flow decreasing by 5%, while 2Q – a 42% year-on-year decline.
Despite the decline in global investment flows in 2018, there was the increase in Kazakhstan. So, in 2018, the gross inflow of FDI in Kazakhstan increased by 15.8%, up to $24.3B, having an effect on the ratio of FDI to GDP, which amounted to 14.5% (in 2017 - 12.9%). It is of note, the Kazakh government plans to bring the ratio of gross FDI to GDP to 19% by 2022.
With each year the Kazakh economy becomes more competitive and attractive to investors. As of late October 2019, 16.8 thousand companies with foreign capital have been operating in Kazakhstan, 18.1% more over the same period a year earlier (14.3 thousand). This year saw Kazakhstan entering the top-55 countries in the ranking of global competitiveness, climbing 4 positions up
Alongside the institutional reforms, enabling Kazakhstan to take the 25th spot in the Doing Business 2020 World Bank ranking, the single operator for attracting investments National Company KazakhInvest was created in 2017, based on a one-window principle, implying the comprehensive support of investors in the implementation of projects in Kazakhstan, including the holding of initial negotiations on the government’s behalf and the provision of all the information necessary for making investment decisions, assistance in obtaining public services at all stages of life cycle.
The goal is to attract at least 91 large companies in the processing sector by 2027, as well as to exclude the leave of foreign investors from the Kazakh market due, inter alia, to the adverse circumstances of the investment climate.
Over the years of independence, Kazakhstan has attracted foreign direct investments of $320B, with $250.2B, or about 80% being attracted over the past ten years, thus indicating the effectiveness of investment policy. The largest volume of FDI was recorded in 2011 ($26.5B), in 2012 ($28.9B) and in 2018 ($24.3B).
The first half of 2019 saw the inflow of FDI into the Kazakh economy standing at $12.1B (a year earlier - $12.5B).
The most direct investment came from investors from the Netherlands ($7.4B), the United States ($5.3B) and Switzerland ($2.5B) in 2018.
Photo credit: Voxball.news
