Reuters reports that the U.N. Conference for Trade and Development (UNCTAD) said in a report that global foreign direct investment (FDI) plunged by 49% in the first half of 2020 from the same period a year ago and is on course to fall by up to 40% for the year, driven by fears of a deep recession.

FDI flows to European economies turned negative for the first time ever, falling to -$7 billion from $202 billion, while flows to the United States fell by 61% to $51 billion.

Global FDI fell as multinationals postponed investments to preserve cash, U.N. said.

"Global FDI flows for the first half of this year went down by close to half... It was more drastic than we expected for the whole year," James Zhan, director of UNCTAD's investment and enterprise division, told.

The flows are expected to decline by 30 to 40% this year and "moderately" in 2021, by 5 to 10%, Zhan said.