GENEVA — Global foreign direct investment increased 13 percent to $883 billion in the first half of the year compared to the second half of last year, largely due to the record level of inflows in the first quarter of $200 billion to the U.S., a report by the Organization for Economic Cooperation and Development said Thursday.
More than 90 percent of the record inflows into the U.S. were channeled to the manufacturing sector, with $86 billion going to the chemical and pharmaceutical sector, and $81 billion to other manufacturing, which includes textiles.
“The continuing recovery of the U.S. economy influenced the record FDI inflows,” Maria Borga of the OECD’s investment division and lead author of the study told WWD.
In the first half, overall inflows into the U.S. reached $266 billion, up sharply compared with $149.2 billion posted in the previous six months, making the U.S. economy the largest recipient of FDI inflows worldwide during the period.
FDI inflows also increased to other advanced economies, which included a 30 percent increase into European Union countries to $177 billion.
Overall, FDI inflows into the 34-member country OECD area in the first six months of this year reached $564 billion, a 50 percent increase from the second half of 2014.
Conversely, FDI into some major emerging economies, experiencing a slowdown in growth or a contraction, witnessed double-digit declines. In China, FDI in the first half declined 12 percent, following high levels at the end of 2014, dropping to $145 billion from $165 billion, and dipped almost 40 percent to $31 billion in Brazil, as the country entered recession. Inflows were also down 30 percent in Indonesia and 36 percent in Argentina, the OECD said.
Some major emerging markets such as India, which is experiencing brisk growth, bucked the downward trend, with FDI increasing 36 percent to $22 billion, up from $16 billion the prior six months, while sanctions-hit Russia rebounded in the second half of 2014 with inflows jumping to $12 billion from $4.7 billion in the six months.