Foreign Direct Investment Increases 27% In 2005

Foreign direct investment into the 30 industrialized countries of the OECD increased by 27% in 2005 from the previous year, with France the biggest foreign spender in the world and Britain the biggest recipient, a report from the OECD revealed on June 28.

The report gave an upbeat assessment of the short-term prospects for foreign direct investment (FDI), which is a measure of spending by companies overseas and serves as an indicator of economic activity and the openness of the world economy.

The OECD study, titled "Trends and Recent Developments in Foreign Direct Investment", estimated FDI into the OECD area in 2005 at $622 billion (495 billion euros), its highest level since 2001 and 27% more than in 2004.

Britain was the biggest recipient of FDI in the world during 2005. It absorbed investment worth $165 billion, a record for the country and due in part to several acquisitions of big British companies by foreign rivals. France came top of the list of foreign investors in the world in 2005, with an outflow of FDI of $116 billion.

"Concerns over security and other strategic interests have arisen in some countries as new major players become outward investors, prompting a number of OECD and other countries to review their FDI regulations," the report said.

Elsewhere in the report, the OECD said that China had received a record amount of FDI in 2005 totaling $72 billion, exceeded only by Britain and the United States.

The OECD, or Organization for Economic Cooperation and Development, has a membership of 30 countries, including the U.S., the biggest European nations, as well as Asian countries Japan and South Korea, plus Australia and New Zealand

Copyright Agence France-Presse, 2006

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