The IMF survey places the Netherlands, China and Luxembourg next in the ranking
The United States is the leading country receiving foreign investment, according to the latest update of the International Monetary Fund’s (IMF) Direct Investment Survey. The position of the North American country increased by 506,000 million dollars during the last year, which means an increase in the confidence of capital of 11.3%. The Netherlands, China and Luxembourg join the United States at the top of the ranking.
PUBLICIDAD
The 112 economies that provided data for this survey recorded an increase in foreign direct investment of 7.1% in local currencies. In dollar terms, this global growth figure translates to only 2.3 per cent, due to the recent strengthening of the dollar, notes an article on the IMF website.
China has moved up in this ranking of investors’ preferences when it comes to depositing their funds. Smaller countries have also gained investor confidence. In addition to Luxembourg, there are similar cases, such as Hong Kong, which ranks sixth, Singapore, which is seventh, and Ireland, which is eighth.
The IMF survey data reflect cross-border financial flows and positions of companies linked by a direct or indirect ownership stake of at least 10%. “Such flows may end up as investments in productive activities within a country, such as funds for new factories and machinery, but may also be purely financial investments with little or no link to the real economy,” the article notes.
Influence
The report reflects that global foreign direct investment statistics are heavily influenced by offshore financial centres, whose influence skyrocketed after the 2008 global financial crisis. “The latest data show that offshore financial centres still account for a disproportionately high share of global FDI. However, their share has gradually declined since 2017, while that of larger economies such as the United States and China has increased.”
The US Jobs and Tax Cut Act, which came into effect in 2018, has been a drag on activity in these centres and the IMF report refers to this.
“This legislation reduced incentives to keep profits in low-tax jurisdictions and led to substantial repatriation of US funds from foreign subsidiaries. In addition, sustained international efforts to reduce tax avoidance, such as the OECD/G20 profit shifting and base erosion initiative, may have stopped some flows to offshore financial centres”.
Source: Atalayar