What is the difference between Foreign Direct Investment (FDI) net inflows and net outflows? – World Bank Data Help Desk

FDI net
inflows are the value of inward direct investment made by non-resident
investors in the reporting economy. FDI net outflows are the value of outward
direct investment made by the residents of the reporting economy to external
economies. 

Inward Direct Investment, also called direct investment in the
reporting economy, includes all liabilities and assets transferred between
resident direct investment enterprises and their direct investors. It also
covers transfers of assets and liabilities between resident and nonresident
fellow enterprises, if the ultimate controlling parent is nonresident.

Outward direct investment, also called direct investment abroad, includes
assets and liabilities transferred between resident direct investors and their
direct investment enterprises. It also covers transfers of assets and
liabilities between resident and nonresident fellow enterprises, if the
ultimate controlling parent is resident.
Outward direct investment is also called direct investment abroad.

Foreign
direct investment is a category of cross-border investment associated with a
resident in one economy having control or a significant degree of influence on
the management of an enterprise that is resident in another economy. As well as
the equity that gives rise to control or influence, direct investment also
includes investment associated with that relationship, including investment in
indirectly influenced or controlled enterprises, investment in fellow
enterprises (enterprises controlled by the same direct investor), debt (except
selected debt), and reverse investment. Implementation of the Balance of
Payments Manual 6th Edition (BPM6) methodology has brought changes to the
definition of direct investment by making it consistent with the OECD
Benchmark Definition of Foreign Direct Investment, notably the recasting in
terms of control and influence, treatment of chains of investment and fellow
enterprises, and presentation on a gross asset and liability basis as well as
according to the directional principle.

Data on FDI
flows are presented on net bases (capital transactions’ credits less debits
between direct investors and their foreign affiliates). Net decreases in assets
or net increases in liabilities are recorded as credits, while net increases in
assets or net decreases in liabilities are recorded as debits. Hence, FDI flows
with a negative sign indicate that at least one of the components of FDI is
negative and not offset by positive amounts of the remaining components. These
are instances of reverse investment or disinvestment.

Data on FDI net inflows and
outflows are based on the sixth edition of the Balance of Payments Manual
(2009) reported by the International Monetary Fund (IMF). Foreign direct investment
data are supplemented by the World Bank staff estimates using data from the
United Nations Conference on Trade and Development (UNCTAD) and official
national sources

Data on FDI net inflows and outflows are based on the sixth edition of the Balance of Payments Manual (2009) reported by the International Monetary Fund (IMF). Foreign direct investment data are supplemented by the World Bank staff estimates using data from the United Nations Conference on Trade and Development (UNCTAD) and official national sources