Geneva, (IANS) : The US, China and India are considered to be the most prospective destinations for foreign direct investment (FDI), predicted the United Nations Conference on Trade and Development (UNCTAD) on Wednesday in its annual report on investment.

According to the World Investment Report 2017: Investment and the Digital Economy, global FDI flows retreated marginally in 2016 by two per cent to $1,75 trillion, amid weak economic growth and significant policy risks perceived by multinational enterprises, Xinhua reported.

Flows to developing countries were especially hard hit, with a decline of 14 per cent, while FDI outflows from developed countries decreased by 11 per cent, mainly owing to a slump in investments from European multinational enterprises.

The US remained the largest recipient of FDI, attracting $391 billion in inflows, followed by Britain with $254 billion, and China with inflows of $134 billion.

According to the report, with a surge of outflows, China also becomes last year the second largest investing country.

In 2017, the global FDI is expected to rise by 5 per cent, to almost $1.8 trillion, attributed to higher economic growth expectations across major regions, a resumption of growth in trade and a recovery in corporate profits.

The modest increase in FDI flows is expected to continue into 2018, taking flows to $1.85 trillion, but still below the all-time peak of $1.9 trillion in 2007, said the report.

“Although this report projects a modest increase for 2017, other factors such as the elevation of geopolitical risks and policy uncertainty may impact the scale of the upturn,” said Mukhisa Kituyi, UNCTAD Secretary-General, adding that “the road to a full recovery for FDI remains bumpy”.