2012 global foreign direct investment drops by 18%: U.N. report

Global foreign direct investment inflows fell 18 percent to $1.35 trillion in 2012, due to a significant decline in investment inflows to developed countries in the wake of the European debt crisis, a U.N. agency said Wednesday in an annual report.

Developing countries attracted a greater amount of foreign direct investment than developed countries for the first time ever, the report by the United Nations Conference on Trade and Development said.

Investment flows to developing economies in 2012 declined by 4 percent to $703 billion, but the figure was still more than the developed economies' total of $561 billion, down 32 percent.

The report said global investment flows in 2013 are forecast to remain close to the 2012 level with an upper range of $1.45 trillion.

The annual average for the three years from 2005, prior to the global financial crisis that erupted in 2008, was $1.48 trillion.

The report warns that factors such as "structural weakness in the global financial system, the possible deterioration of the macroeconomics environment, and significant policy uncertainty in areas crucial for investor confidence might lead to a further decline" in global foreign direct investment flows.