Foreign Direct Investment (FDI) is essential for growth, increasing jobs and boosting economies and there are some countries which benefit from FDI much more than others. FDI is an investment made by a company or an individual in one country to another country and its economy and this can indicate a lot.
What Does FDI Indicate?
So, what exactly is FDI an indicator of? When countries receive high levels of FDI, it suggests a growing and evolving economy, an attractive macroeconomic policy and a wide range of investment opportunities. As you might expect, FDI is incredibly important for developing nations and there are many which have benefited greatly from significant FDI over the years, but it is the big players that top the list when it comes to countries receiving FDI.
Unsurprisingly, the USA tops the list when it comes to FDI inflows with $251 billion in 2019. They are followed by China with $140 billion in 2019 and it is easy to see why these two always come out on top as such powerful economies in the world.
It gets a little bit more interesting from here with emerging nations that are now benefiting greatly from foreign investment. Singapore came in third in 2019 with an FDI inflow of $110 in 2019, followed by Brazil with $75 billion. Singapore, in particular, has been on the rise in recent years and is now considered a business hub and innovative place which attracts a lot of foreign investors. Singapore has become one of the top spots for business trips and attracts visits from investors with fantastic places to stay like the most stylish serviced apartments in Singapore.
The UK came next in 5th in 2019 with $61 billion but this is much lower than years gone by and a 6% drop compared to the year before. It is believed that the Brexit saga is the main reason for this drop and will be a great cause for concern for UK businesses.
The Impact of COVID-19
Of course, the COVID-19 outbreak will have a significant impact on foreign investment both now and in the years to come. Global FDI totaled $1.39 trillion in 2019 which was slightly less than 2018 but forecasts predict a massive decrease for 2020 due to the pandemic with investor confidence so low and economies taking enormous hits all over the globe.
It is always interesting to look at what countries are receiving the most FDI each year and is always an accurate reflection of global affairs. The US and China always lead the way, but there is a lot of movement after these two nations with a number of emerging economies receiving significant investment in recent times.