Paris - Foreign direct investment (FDI) from OECD countries in 2007 leapt to a record $1820 billion from $1200 billion in 2006, but is projected to fall sharply in 2008, according to estimates from the OECD (the
"If a slowdown in merger and acquisitions observed in the first half of 2008 continues, FDI outflows could fall to $1140 billion," said the OECD, in a 25 June statement.
FDI within OECD countries rose to $1370 billion in 2007, up from $1050 billion in 2006 and up slightly from the previous record of $1290 billion set in 2000, said the OECD, adding that FDI inflows are projected to fall back in 2008 to £1035 bllion.
According to the OECD, projected falls in FDI outflows from OECD countries in 2008 will also affect developing countries. A projected 37 percent drop in OECD investment outside Europe in 2008 could result in a decline of around 40 percent in FDI for developing countries, to around $276 billion from a record investment in 2007 of $471 billion.
The top OECD investor and recipient of foreign investment in 2007 remains the US, with $333 billion in outflows and $238 billion in inflows. Second was the UK, with $230 billion in outflows and $186 billion in inflows, followed by France with outflows of $225 billion and inflows of $158 billion.
FDI into developing economies reached a record $471 billion in 2007, an increase of almost 30 percent over the previous high of $368 billion in 2006. Brazil, Russia, India, China and South Africa accounted for between 50 and 60 percent of developing country inflows, the OECD said.