The US, China and India are considered to be the most prospective destinations for foreign direct investment (FDI), predicted the United Nations Conference on Trade and Development (UNCTAD) on 7 June in its annual report on investment.
According to the World Investment Report 2017: Investment and the Digital Economy, global FDI flows retreated marginally in 2016 by two per cent to $1,75 trillion, amid weak economic growth and significant policy risks perceived by multinational enterprises, Xinhua reported.
Flows to developing countries were especially hard hit, with a decline of 14 per cent, while FDI outflows from developed countries decreased by 11 per cent, mainly owing to a slump in investments from European multinational enterprises.
The US remained the largest recipient of FDI, attracting $391 billion in inflows, followed by Britain with $254 billion, and China with inflows of $134 billion.
According to the report, with a surge of outflows, China also becomes last year the second largest investing country.
In 2017, the global FDI is expected to rise by 5 per cent, to almost $1.8 trillion, attributed to higher economic growth expectations across major regions, a resumption of growth in trade and a recovery in corporate profits.
The modest increase in FDI flows is expected to continue into 2018, taking flows to $1.85 trillion, but still below the all-time peak of $1.9 trillion in 2007, said the report.
"Although this report projects a modest increase for 2017, other factors such as the elevation of geopolitical risks and policy uncertainty may impact the scale of the upturn," said Mukhisa Kituyi, UNCTAD Secretary-General, adding that "the road to a full recovery for FDI remains bumpy".