Global foreign direct investment (FDI) rose by 16 per cent last year to an estimated $1.66 trillion, the first time it surpassed pre-crisis levels of 2007, the United Nations Conference on Trade and Development said.
This was the first time that flows surpassed the pre-crisis levels of 2007, the agency's Global Investment Trends Monitor reported.
It described the prospects for 2012 as "guarded" due to the fragility of the global economy.
Increases in flows of FDI tends to be beneficial for Ireland. By many measures, such as the percentage of total employment accounted for by foreign companies, Ireland is highly dependent on foreign investment.
The report only provides figures for FDI outflows. Inflow data will be published later in the year.
Last year Irish companies reduced their foreign investments. Outward FDI was negative to the tune of $1.6 billion according to the report. Ireland was the only country in the developed world to register disinvestment abroad last year. In 2010, total outward FDI by Irish companies stood at $17.8 billion.
Globally, companies' FDI last year was accounted for in large part by mergers and acquisitions and increased amounts of cash reserves kept in foreign affiliates. The third form of FDI and the one generally considered to have most benefit for host countries – investment in greenfield projects, such as new factories - "appeared to be limited" the report said.
FDI from developed countries rose by 25 per cent in 2011, exceeding $1.23 trillion, with the EU, North America, and Japan all contributing to the growth.
Meanwhile, FDI outflows from developing countries fell by 7 per cent. As a result, the share of developing and transition economies in global FDI outflows declined from 31 per cent in 2010 to 26 per cent in 2011.
Preliminary responses to UNCTAD's annaul survey of FDI intentions among multinational firms reveal that they are generally less optimistic for 2012 than before.
"Recent data also give reason for caution when judging FDI prospects for 2012. Greenfield projects fell sharply in value terms in the first quarter of 2012, as compared to the previous year", the report said.
