Global foreign direct investment (FDI) fell 12.4% to $1.3 trillion in 2022, according to the United Nations Conference on Trade and Development (UNCTAD). The decline was driven by the war in Ukraine, rising food and energy prices, and tighter financial conditions, Turanews.kz reports.
Developed countries bore the brunt of the decline, with FDI inflows falling by 25.4% to $495 billion. North America saw the largest decline, with FDI inflows falling by 33.7% to $233 billion.
Developing countries fared better, with FDI inflows increasing by 4% to $811 billion. Kazakhstan was one of the top performers, with FDI inflows increasing by 83.1% to $6.1 billion. This was the highest level of FDI inflows into Kazakhstan since 2013.
The increase in FDI inflows into Kazakhstan was driven by a number of factors, including the country’s strong economic growth, its attractive investment climate, and its large natural resource reserves.
The main sectors that attracted FDI into Kazakhstan in 2022 were oil and gas, mining, and manufacturing. The top 10 countries investing in Kazakhstan were the Netherlands, the United States, Switzerland, Russia, China, the United Kingdom, Canada, Italy, Germany, and France.
The UNCTAD report also highlighted the need for more FDI to flow into developing countries to help them achieve their sustainable development goals. The report found that developing countries need to receive $1.7 trillion in FDI annually to meet their SDG targets. However, in 2022, only $544 billion in FDI flowed into developing countries.
The report called on governments and businesses to take steps to attract more FDI to developing countries. These steps include improving the investment climate, providing tax incentives, and creating special economic zones.
Regional Distribution of FDI Inflows in Kazakhstan
The Atyrau region and Almaty city were the main recipients of FDI inflows in Kazakhstan in the first quarter of 2023. The Atyrau region received 31.1% of all FDI inflows, followed by Almaty city with 30.1%.
The Atyrau region is home to some of Kazakhstan’s largest oil and gas fields, which attracted a lot of foreign investment in the first quarter of 2023. Almaty city is the largest commercial and financial center in Kazakhstan, and it also attracted a lot of FDI inflows in the first quarter of 2023.
Top 10 Countries Investing in Kazakhstan
The top 10 countries investing in Kazakhstan in the first quarter of 2023 were:
- Netherlands (20.5%)
- United States (19%)
- Switzerland (10%)
- Russia (9.6%)
- China (7.7%)
- United Kingdom (5.8%)
- Canada (4.5%)
- Italy (3.8%)
- Germany (3.5%)
- France (2.9%)
The Netherlands has been the top investor in Kazakhstan for several years. The United States and Switzerland are also major investors in the country. Russia’s investment in Kazakhstan decreased in 2022 due to the conflict with Ukraine, but it rebounded in the first quarter of 2023.
Income of Foreign Investors in Kazakhstan
The income of foreign investors in Kazakhstan increased by 11.4% in 2022. The total income of investors from all countries amounted to $24.5 billion.
The increase in income was driven by the strong performance of the Kazakh economy and the rising prices of oil and gas. The mining and manufacturing sectors also contributed to the increase in income.
The outlook for FDI inflows into Kazakhstan is positive. The country’s strong economic growth, attractive investment climate, and large natural resource reserves are expected to continue to attract foreign investment.
