Recent data from the ABS shows that the stock of foreign investment in Australia has increased each calendar year despite the pandemic, going from $3.92 trillion in 2019, to $4.04 trillion in 2020, and reaching $4.14 trillion in 2021. Over the past two years that’s annual growth of 2.7%, which is not bad at a time when in many respects Australia was closed off to the world – but a fair way from the 7.7% average growth seen in the two years before COVID-19.
The US remains our largest source of foreign investment, contributing almost a quarter of inbound funds. However, over the past two years, annual growth of US foreign investment into Australia was only 1.9%, much lower than the same measure in the two years prior to COVID-19 (5.1%). Similarly, the UK’s foreign investment in Australia (the third largest source of foreign investment) fell by an annual average of 0.4% since 2019, compared with 17.4% growth in the two years before the pandemic. This has caused the UK to fall from the second biggest foreign investor in Australia in 2019 to the third largest.
Despite political tensions, the level of China’s foreign investment in Australia has still risen by a healthy annual average of 6.7% in the past two years, but still below the average 11.3% growth in the two years pre-pandemic.