Denmark ranked as the most attractive investment destination for international investors in the Milken Institute Global Opportunity Index 2024.
Denmark was followed by Sweden, Finland, the U.S. and the UK, according to a report about the index issued Tuesday.
The Netherlands, Germany, Switzerland, Norway and Ireland rounded out the top 10 countries in the index.
Singapore, Hong Kong and Japan — at Nos. 14, 15 and 16, respectively — were the only nations outside of Western Europe or North America in the top 20.
The top 20 countries in the index jointly attracted 64.5% of global foreign capital inflows in 2021.
The Milken Institute designed the index to help investors "seeking opportunities outside their local markets, as well as countries intending to improve their business environments," the report said.
The index is based on 100 indicators classified into five categories — business perception, economic fundamentals, financial services, institutional framework, and international standards and policy.
Despite their overall strong performance, some of the top-ranked countries need to improve in terms of international standards and policy, and in economic fundamentals. For example, New Zealand, Australia, Iceland and Hong Kong scored relatively low on international standards and policy, with vulnerabilities arising in their economic openness.
In terms of economic fundamentals, Japan, Canada, Singapore and the U.S. trailed their advanced economic peers, with Japan performing particularly poorly. Japan's relatively low ranking in economic fundamentals is partly due to weaknesses in its economic performance as measured by gross domestic product growth, trade and central government debt, among other metrics.
Among the other major economies, China ranked No. 39, while India came in at No. 72.
"The post-pandemic return of high inflation led central banks around the world to adopt tightening monetary policies, resulting in rising interest rates through most of 2022," Milliken said in the report. "Now, after nearly a year and a half, major central banks [including the U.S. Federal Reserve, the European Central Bank and the Bank of England] are beginning to halt the rate-rising cycle. While this has generated optimism among investors, financial conditions remain tight amid warnings of further interest rate spikes and a global slowdown in growth."
In 2023, the top 10 countries in the index were Sweden, the UK, Denmark, Finland, the U.S. Germany, New Zealand, the Netherlands, Norway and Switzerland.