Photo taken on Jan. 7, 2020 shows China-produced sedans at Tesla's gigafactory in Shanghai, east China. (Xinhua/Ding Ting)

In its "World Investment Report 2021," the Geneva-based UN trade and development body said FDI flows fell to one trillion U.S. dollars in 2020 from 1.5 trillion U.S. dollars the previous year.

Lockdowns caused by the COVID-19 pandemic around the world slowed down existing investment projects, and the prospects of a recession led multinational enterprises to reassess new projects, the report said.

GENEVA, June 21  -- The United Nations Conference on Trade and Development

said Monday that foreign direct investment (FDI) flows plunged globally by 35 percent in 2020 due to the COVID-19 pandemic, but are expected to bottom out in 2021 mainly thanks to the recovery in Asia.

In its "World Investment Report 2021," the Geneva-based UN trade and development body said FDI flows fell to one trillion U.S. dollars in 2020 from 1.5 trillion U.S. dollars the previous year.

Lockdowns caused by the COVID-19 pandemic around the world slowed down existing investment projects, and the prospects of a recession led multinational enterprises to reassess new projects, the report said.

UNCTAD said that in developing countries, the number of newly announced greenfield projects fell by 42 percent and international project finance deals, which are important for infrastructure, declined by 14 percent.

"These investment types are crucial for productive capacity and infrastructure development and thus for sustainable recovery prospects," Acting UNCTAD Secretary-General Isabelle Durant said.

The UNCTAD also said that COVID-19 caused a collapse in investment flows to sectors relevant for the Sustainable Development Goals (SDGs) in developing countries.

"The drop in foreign investment in SDG-related sectors may reverse the progress achieved in SDG investment in recent years, posing a risk to delivering the 2030 Agenda for Sustainable Development and to sustained post-pandemic recovery," Durant warned.