GENEVA - Global foreign investment flows are likely to have fallen by more than 20 percent last year due to the economic and financial crisis, twice as much as previously estimated, a UN agency said Monday.

Inflows of foreign direct investment (FDI) worldwide reached an estimated 1.4 trillion dollars (1.05 trillion euros) in 2008, 21 percent less than the previous year, according to preliminary annual data released by the UN Conference on Trade and Investment.

Last September, UNCTAD had forecast a 10 percent dip in cross-border investment over 2007, when FDI reached a record 1.8 trillion dollars.

UNCTAD said in an advance copy of its annual FDI assessment that 2008 would mark the end of a four-year cycle of growth in international investment.

There were signs that the trend was continuing into 2009, the agency added, as leading companies cut costs and investment because of the poor economic outlook.

It predicted that after the "sharp decline" in cross-border mergers and acquisitions from their record levels in 2008, a "large number" of greenfield investment projects for new plants or bases abroad would be cancelled or postponed this year.

Developed economies have so far been the hardest hit as FDI was cut by an estimated one-third in 2008, UNCTAD estimated. That would wipe out the gains they made in the previous year.

FDI into Britain slumped from 224 billion dollars in 2007 to an estimated 109.4 billion last year.

Traditional greenfield locations, Ireland (minus 6.1 billion dollars) and Finland (minus 6.3 billion dollars), were expected to record net outflows for 2008 as investors retreated.

Eastern and central European economies suffered mixed fortunes with a slip in FDI for Poland and Hungary, but growth for the Czech Republic, Romania and Russia.

Direct investment flows to the United States slowed by just over five percent to 220 billion dollars, while Japan captured 23 percent less FDI (17.4 billion dollars).

Developing countries managed to hold on to some growth in inward direct investment in 2008.

However, the UN thinktank suggested that poorer countries had been sheltered so far from the worst impact of the economic crisis and warned that they could suffer from an overall decline in foreign investment in 2009.

China (up 10 percent, 82 billion dollars) and India (up 60 percent, 36.7 billion dollars) attracted more FDI in 2008.

But Indonesia (minus 21 percent, 5.5 billion dollars) Singapore (minus 57 percent, 10.3 billion dollars) and Thailand (minus four percent, 9.2 billion dollars) were the exceptions in Asia with declines.

Overall, both domestic and foreign investments were hit by a combination of two factors.

First of all, corporate world's ability to invest was diminished by a combination of the lower availability of finance as well as declining company profits.

Subsequently, the declining economic climate dampened the propensity of firms to invest, especially for companies in wealthy countries that were suffering a "severe recession," UNCTAD said.