US Foreign Direct Investment: % of GDP, 1960 – 2023 (2024)

FAQs

What percentage of US GDP today is foreign direct investment? ›

The average value for the USA during that period was 1.16 percent with a minimum of 0.07 percent in 1971 and a maximum of 3.41 percent in 2000. The latest value from 2021 is 1.92 percent. For comparison, the world average in 2021 based on 180 countries is 3.69 percent.

Foreign Direct Investment in the United States averaged 29390.22 USD Million from 1994 until 2022, reaching an all time high of 74669.00 USD Million in the second quarter of 2021 and a record low of -9988.00 USD Million in the fourth quarter of 2001.

Free-trade agreements with 20 other countries provide access to hundreds of millions of additional consumers. A strong and robust consumer market is a key reason the U.S. ranks top in the world for FDI. The U.S. hosts the most developed, flexible and efficient financial markets in the world.

United States Investment: % of GDP

United States Investment accounted for 20.7 % of its Nominal GDP in Mar 2023, compared with a ratio of 21.3 % in the previous quarter. US investment share of Nominal GDP data is updated quarterly, available from Mar 1947 to Mar 2023, with an average ratio of 22.3 %.

In 2021, no country had a higher foreign direct investment (FDI) position in the United States than Japan, followed by the Netherlands and Canada. At that time, Japan had over 690 billion U.S. dollars invested in the United States.

The United States recorded the largest increase of inward foreign direct investment of all economies in 2021. The latest release of the IMF's Coordinated Direct Investment Survey shows the US position increasing by $506 billion, or 11.3 percent, last year.

Top recipients of FDI inflows worldwide in Q3 2022 were the United States (USD 86 billion), Ireland (USD 37 billion) and the United Kingdom (USD 36 billion).

Our new analysis shows that foreign investors owned about 40 percent of US corporate equity in 2019, up substantially over the last few decades.

Foreign direct investment impacts the U.S. economy in many positive ways. For example, FDI: Creates New Jobs: U.S. affiliates of foreign companies (majority-owned) employ approximately 5.3 million U.S. workers, or 4.6% of private industry employment.

What are the benefits of foreign investment in the US? ›

Economic growth

FDI boosts the manufacturing and services sector which results in the creation of jobs and helps to reduce unemployment rates in the country. Increased employment translates to higher incomes and equips the population with more buying powers, boosting the overall economy of a country.

Historically, the United Kingdom had been the largest cumulative overseas investor in the United States. But because of weak FDIUS flows in 2019 and divestments in 2020, Britain dropped in ranking to fourth place, behind Japan, Germany, and Canada, respectively.

Percent of world Foreign Direct Investment, 2020 - Country rankings: The average for 2020 based on 186 countries was 0.54 percent. The highest value was in China: 21.36 percent and the lowest value was in Switzerland: -21.72 percent. The indicator is available from 1993 to 2020.

Switzerland is one of the best countries to invest in. It has one of the lowest federal corporate tax rates in the world, at 8.5%, allowing businesses to save a significant amount of money on their profits. Switzerland's innovation performance is 142.4% of the EU average.

U.S. gross domestic product contributions 2000-2021, by sector. In 2021, the agriculture sector contributed around 0.96 percent to the Gross Domestic Product (GDP) of the United States. In that same year, 17.88 percent came from industry, and the service sector contributed the most to the GDP, at 77.6 percent.

In 2022, the finance, real estate, insurance, rental, and leasing industry added the most value to the GDP of the United States.

China's FDI in the United States (stock) was $38.0 billion in 2020, down 4.2 percent from 2019. China's reported direct investment in the U.S. is led by wholesale trade, manufacturing, and information services.

How much has the US invested in China? ›

U.S. companies spent about $11 billion in 2022 buying or investing in Chinese companies, according to the data service firm Dealogic.

The US has the world's single largest economy, accounting for almost a quarter of global GDP (at market exchange rates), one-fifth of global FDI, and more than a third of stock market capitalisation. It is the most important export destination for one-fifth of countries around the world.

Foreign direct investment refers to capital investment that is owned and operated by foreigners. Therefore, a U.S. electronics company opens and operates a new factory in India is a foreign direct investment that increases net capital outflow.

FDI is included in the gross domestic when the money that is invested will be spent to create economic activity to form physical capital.

Singapore and China are celebrating the 30th anniversary of the establishment of our diplomatic relations in 2020. Since 2013, China has been Singapore's largest trading partner, and Singapore has been China's largest foreign investor.

Foreign Direct Investment (FDI) can bring many advantages to the host country, such as technology transfer and innovation, increased employment and income, improved infrastructure and market access, and positive spillovers and linkages.

If the Federal Reserve's holdings are excluded, foreigners own nearly 60 percent of outstanding marketable treasuries. Foreigners own less-significant portions of other asset markets. Their holdings of equities, though large in dollar terms, are small relative to the size of the equity market.

Buying foreign stocks allows investors to diversify their portfolio's risk, in addition to giving them exposure to the growth of other economies. Financial advisors recommend a 5% to 10% exposure to foreign stocks for conservative investors, and up to 25% for aggressive investors.

Current stock market valuation

The current GDP is $26.5 Trillion. The total market cap of US stocks is $41.4 Trillion. So according to the Warren Buffett indicator the market is currently 56% overvalued.

What are the disadvantages of foreign direct investment? ›

Key Takeaways. When Americans buy stocks or bonds from foreign-based companies, any investment income (interest, dividends) and capital gains are subject to U.S. income tax and taxes levied by the company's home country.

Increases capital- One of the most important roles of FDI is, it brings economic stability by increasing capital to a country. This results in financing new businesses, development works, and other important factors for economic growth.

An example would be McDonald's investing in an Asian country to increase the number of stores in the region. Here, a business enters a foreign economy to strengthen a part of its supply chain without changing its business in any way.

1. Warren Buffett. As one of the world's wealthiest investors, Warren Buffett almost needs no introduction. He's CEO and chairman of Berkshire Hathaway, a $665 billion conglomerate that acts as the holding company for Buffett's investments, both its wholly-owned companies and its stocks.

The study revealed that Singapore ranks highest as the country most interested in stocks and trading. With a total search score of 555 out of a possible 700, Singapore topped the list for its population having the highest search levels for the phrases 'stocks', 'buy stocks', and 'interest rate' worldwide.

Warren Edward Buffett (/ˈbʌfɪt/ BUF-it; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway.

The main investing countries in the U.S. are Japan, Germany, Canada, the United Kingdom, Ireland and France. Most of these investments are in manufacturing, financial and insurance activities, and trade and maintenance. In 2021, California received the most investment, followed by Massachusetts and New York (BEA).

Where does the US invest? ›

The combined tally of investment of three years makes Maharashtra the most attractive investment destination, states the survey. The investment is more than Karnataka ( ₹2,93,149 crore, 331 projects) and Gujarat ( ₹ 2,36,866 crore, 602 projects), states the survey.

By U.S. state, California received the most investment, totaling $64.1 billion, followed by Massachusetts ($53.8 billion) and New York ($34.2 billion). Greenfield investment expenditures—expenditures to either establish a new U.S. business or to expand an existing foreign-owned U.S. business—were $3.4 billion in 2021.

1. Wyoming: 203% 5-year ROI on College. Wyoming has some of the highest wages for high school graduates: $31,936 a year, on average. This results in a 43 percent increase in pay for earning a bachelor's degree.

U.S. Treasury securities are considered to be about the safest investments on earth. That's because they are backed by the full faith and credit of the U.S. government.

In 2021, no country had a higher foreign direct investment (FDI) position in the United States than Japan, followed by the Netherlands and Canada. At that time, Japan had over 690 billion U.S. dollars invested in the United States.

Government Debt to GDP in the United States averaged 65.20 percent of GDP from 1940 until 2022, reaching an all time high of 129.00 percent of GDP in 2022 and a record low of 31.80 percent of GDP in 1981.

Domestic Holders of Federal Debt

The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation's money supply, is the largest holder of such debt.

Has US debt ever exceed GDP? ›

These have corresponded with periods when the federal government ran large budget deficits: the Reagan-Bush years of the 1980s and early 1990s; the 2008 financial crisis and subsequent Great Recession; and the pandemic-caused recession of 2020, when federal debt spiked to an all-time high of 134.8% of GDP.

With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt. Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.

Flashpoints that greatly contributed to the debt over the past 50 years include the wars in Iraq and Afghanistan, the 2008 financial crisis and the 2020 COVID-19 pandemic -- the latter two prompting sweeping stimulus measures from Congress that cost trillions of dollars.

As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Norway is the country with the highest level of household debt based on OECD data followed by Denmark and the Netherlands.

Minnesota comes in first with a 46.3 percent FDI employment growth rate. Job growth in Minnesota is more than double the national rate. International companies like Rolls-Royce have accelerated Minnesota's job growth.

Foreign direct investment impacts the U.S. economy in many positive ways. For example, FDI: Creates New Jobs: U.S. affiliates of foreign companies (majority-owned) employ approximately 5.3 million U.S. workers, or 4.6% of private industry employment.