Foreign direct investment hits $1.8T last year, outlook remains uncertain due to geopolitical tensions, OECD says
Global foreign direct investment (FDI) flows surpassed its pre-pandemic levels by 37%, hitting $1.8 trillion in 2021, the Organization of Economic Co-operation Countries (OECD) said on Friday.
The figure was up 88% from the previous year, an OECD statement said, but warned that the outlook remains uncertain due to geopolitical tensions.
“This growth was driven by OECD area earnings on inward and outward FDI reaching some of their highest levels since 2005; of those earnings, less was distributed to shareholders, resulting in unprecedented levels of reinvestment of earnings,” the statement said.
Inflows to the OECD area increased to $809 billion, 5% above pre-pandemic levels, while outflows hit a 7-year high at $1.3 trillion, driven by strong reinvestment of earnings.
In 2021, the US was the top FDI destination worldwide, attracting FDI flows worth $382 billion. It was followed by China with $334 billion, Canada with $60 billion and Brazil with $50 billion last year.
The US was again the major source of FDI outflows worldwide, with outflows peaking at $434 billion due to high levels of reinvestment of earnings.
Other top sources included Germany, Japan, China and the UK each recording more than $100 billion in outflows.