NEW DELHI, May 1: The global Foreign Direct Investment (FDI) rose by 25 per cent to 1.7 trillion dollars in 2015-16, reaching its highest level since the financial crisis started in 2007, Organisation for Economic Co-operation and Development (OECD) report said today. Part of the increase was the result of financial and corporate restructuring rather than of new, productive investments. The report also said the global FDI flows were boosted by record levels of FDI inflows in the United States at 200 billion dollars in the first half of 2015, which were partly driven by cross-border M&As designed to reduce companies’ US tax obligations. After US, the inflow is followed by China (the largest recipient of FDI worldwide in 2010-2014), Switzerland and Ireland (due to record levels of FDI inflows for both countries in 2015). The United States remained by far the largest source of FDI worldwide, followed by China, Japan, Switzerland, the Netherlands (excluding investments from Special Purpose Entities) and Ireland OECD FDI inflows almost doubled compared to 2014, mostly due to large inflows in Ireland, the Netherlands, Switzerland and the United States. Investors from those countries were also responsible for the 35 per cent increase in OECD outflows. These countries appear among the top destinations and top sources of FDI worldwide in 2015, it added. OECD FDI flows for resident special purpose entities (SPEs) decreased in 2015 by around 10 per cent. The FDI inflows to the G20 as a whole went up by 26 per cent and the flows to OECD G20 economies increased by 81 per cent but were partly offset by a 13 per cent drop in FDI inflows to non-OECD G20 economies. As a result of these changes, the share of the non OECD G20 countries in global inflows dropped from about one-third to just over one-fifth. In addition, for the first time since the financial crisis, inflows to the OECD and the non OECD G20 countries diverged, inflows to the OECD surged but those to the non-OECD G20 dropped. FDI flows into the OECD area increased by 86 per cent as compared to 2014, from 572 billion dollars to 1 063 billion dollars, and FDI outflows were up 35 per cent from 875 billion dollars to 1183 billion dollars, it added. (UNI)
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