Global foreign direct investment grew six percent last year, with the United States reclaiming from China the title of leading destination for foreign capital, a UN report said on Wednesday. World-wide foreign direct investment flows reached 612 billion dollars last year compared with 580 billion in 2003, marking the end of a downturn in FDI flows since 2001, the United Nations Conference on Trade and Development (Unctad) said in a report.
"This increase is good news for developing countries, which now account for an estimated 42 percent of world FDI inflows, compared to 27 percent during 2001-2003", said the head of Unctad investment unit, Karl Sauvant, in a statement.
However, developed countries saw a 16 percent drop in investment inflows last year to 321 billion dollars from 380 billion dollars in 2003.
The report said the decrease was mainly the result of big repayments of intra-company loans by firms based particularly in Belgium, Germany and the Netherlands.
Despite the lower level of FDI into developed countries, the United States saw a recovery in investment inflows.
The US was the top destination for FDI flows after a slump since 2001 caused by the bursting of the Internet bubble.
FDI to the US grew fourfold last year to 121 billion dollars.
Meanwhile China fell from first to second place with 62 billion dollars. FDI in the Asia Pacific region as a whole surged by 55 percent last year to 166 billion euros.
Investment flows to developing countries surged 48 percent last year to 255 billion dollars, marking a historic high.
Looking ahead, the report said: "Overall, Unctad is predicting that FDI flows will expand over the medium term because the main fundamentals that drive FDI - a broad-based economic recovery, equity market valuations, and mergers and acquisitions - are in place."
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