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Global FDI reached 15-year low in 2020, China overtakes US: OECD data

As the coronavirus wreaked havoc on the global economy, global FDI flows dropped 38% in 2020 to $846 billion, the lowest since 2005, according to Organisation for Economic Cooperation and Development

twitter-logoReuters | May 3, 2021 | Updated 12:37 IST
Global FDI reached 15-year low in 2020, China overtakes US: OECD data

Global foreign direct investment flows ebbed to a 15-year low last year and China, one of the few major economies to eke out growth, overtook the United States as the top destination, OECD data showed on Friday.

As the coronavirus wreaked havoc on the global economy, global FDI flows dropped 38% in 2020 to $846 billion, the lowest level since 2005, according to the Paris-based Organisation for Economic Cooperation and Development.

That represented only 1% of global gross domestic product, a level not seen since 1999.

A recovery in cross-border mergers and acquisitions activity in the latter part of 2020 and so far this year could fuel a rebound in FDI in 2021, the OECD said.

China surpassed the United States last year as the leading destination for foreign investment while large parts of the world's biggest economy were shut down due to the pandemic.

India and Luxembourg, where many shell companies are legally registered, followed as top destinations for inflows, the OECD said.

Also read: COVID-19: US economy registers record growth in Q3; pandemic impact to last

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