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Fund inflows soared 66.4% last year from 2009, IMF says

Fresh incoming funds to Thailand surged 66.4 per cent to US$178 billion (Bt5.7 trillion) last year from three years earlier, according to the International Monetary Fund.

In its Coordinated Direct Investment Survey (CDIS), inward investment in 2009 was only $107 billion, or Bt3.4 trillion based on Bt32 to the US dollar.

Outward investment grew even faster - 246 per cent from $14 billion in 2009 to $48.5 billion.

This reflected the authorities' attempts to encourage overseas investment to offset the net inflows.

The CDIS is a worldwide survey of bilateral direct investment positions, conducted annually since 2009. The 2012 survey includes data from 88 economies.

Inward direct investment

Last year 64 per cent of total inward direct investment of $26 trillion was concentrated in the 10 economies with the largest inward direct investment. About 78 per cent of the total outward direct investment of $26.6 trillion originated from the 10 economies with the largest outward direct investment.

For the 86 economies that reported data in both 2011 and 2012, inward direct investment positions increased 7.9 per cent from $24.1 trillion to $26 trillion.

At $3.16 trillion, the United States was the biggest source of global direct investment. Quantitative easing resulted in a massive liquidity surplus in the US and that money was shifted outwards, chasing higher returns.

Others in the top 10 are the Netherlands with $2.87 trillion, the United Kingdom with $2.39 trillion, Luxembourg with $2.1 trillion, France with $1.22 trillion, Germany with $1.15 trillion, Hong Kong with $1.12 trillion, Switzerland with $1.06 trillion, Japan with $1.01 trillion and the British Virgin Islands with $936 billion.

Foreign investment has many advantages for both investors and recipients, chiefly to finance growth anywhere in the world. However, excessive growth at destinations could fuel bubbles and destabilise the markets in the event of massive outflows.



Direct investment

Inward and outward investment over past four years in US$ bn

Direction 2009 2010 2011 2012

Inward 106.9 139.3 155 178

Outward 14 20.36 37.2 48.5

Source: IMF


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