PARIS, June 28: Foreign direct investment (FDI) into the 30 industrialised countries of the OECD increased by 27pc in 2005 from the previous year, with France the biggest foreign spender in the world and Britain the biggest recipient, a report from the OECD revealed on Wednesday.

The report gave an upbeat assessment of the short-term prospects for FDI, which is a measure of spending by companies overseas and serves as an indicator of economic activity and the openness of the world economy.

“The near-term outlook for FDI remains strong, with OECD economies forecast to stay buoyant for the rest of 2006,” the report said.

The OECD study, titled Trends and Recent Developments in Foreign Direct Investment, estimated FDI into the OECD area in 2005 at $622bn, its highest level since 2001 and 27.0pc more than in 2004.

The OECD, or Organisation for Economic Cooperation and Development, has a membership of 30 countries, including the United States, the biggest European nations, as well as Asian countries Japan and South Korea, plus Australia and New Zealand.

Britain was the biggest recipient of FDI in the world during 2005. It absorbed investment worth $165bn, a record for the country and due in part to several acquisitions of big British companies by foreign rivals.The report cited the acquisition of British shipping group P and O by Dubai Ports World of the United Arab Emirates.

France came top of the list of foreign investors in the world in 2005, with an outflow of FDI of $116bn.

The OECD said the position of France as the biggest foreign investor was because of several big takeovers by French companies in 2005, namely the acquisition of British drinks group Allied Domecq by Pernod Ricard and the takeover of Belgian power group Electrabel by Suez.—AFP