Analysis of Australia's foreign direct investment and outward investment trends during the period from 2020 to 2024, considering global economic challenges.
DOI:
https://doi.org/10.64184/ajlps.V2.I3.Y2025.P111-149.152Keywords:
foreign investment, Australia, its foreign investments, the global economy.Abstract
This study provides a comparative analysis of foreign direct investment (FDI) inflows into Australia and its outward investments during 2020–2024 amid global economic challenges such as the COVID-19 pandemic, tighter monetary policies, and geopolitical tensions. Findings reveal that Australia has remained an attractive destination for FDI, with inflows concentrated in mining, energy, and financial services, while outward investments increasingly targeted advanced economies, particularly the United States, the United Kingdom, and the European Union. Portfolio flows were more volatile than FDI due to interest rate fluctuations and asset revaluations, whereas FDI remained more stable and tied to long-term projects. Geopolitically, regulatory restrictions and strained relations with China limited Asian inflows, while stronger ties with traditional partners narrowed the gap between foreign assets in Australia and Australia’s outward assets. On the income side, payments to foreign investors grew in line with rising stocks, while Australia’s income from its overseas investments increased, driven by improved returns in advanced markets. The study concludes that enhancing sectoral and geographic diversification, simplifying investment approval filters, and channeling flows into energy transition and productive technologies are key pathways to maximize the impact on productivity, national income, and financial stability.
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