Foreign direct investment (FDI) is facing a turning point, according to the latest Global Investment Trends Monitor published by the United Nations Conference on Trade and Development (UNCTAD). The report indicated that global FDI grew by 11% in 2024, reaching an estimated $1.4 trillion.
However, when excluding flows passing through European conduit economies—often serving as intermediaries before investments reach their final destinations—global FDI actually declined by 8%.
Looking ahead to 2025, the report projected moderate growth in FDI, driven by improved financing conditions and a rise in mergers and acquisitions (M&A). Despite this optimistic outlook, significant risks and persistent investor uncertainty continue to cast doubt on future expansion.
The analysis emphasized that multinational transactions in conduit economies played a crucial role in driving a 43% surge in FDI to developed economies. Without these intermediary flows, investments in developed markets would have fallen by 15%.
On the other hand, FDI in developing nations experienced a 2% decline, posing a challenge to achieving the United Nations’ Sustainable Development Goals (SDGs). The report noted an 11% global drop in investments across SDG-related sectors, with fewer projects in critical areas such as agrifood systems, infrastructure, and water and sanitation compared to 2015, when the SDGs were first introduced.
The number of greenfield projects—those involving entirely new ventures—decreased by 8%, while their value declined by 7%. Despite these setbacks, investments in high-tech sectors such as semiconductors and artificial intelligence (AI) helped sustain the overall investment value close to 2023’s record levels.
International project financing, particularly in infrastructure, continued its downward trajectory, with a 26% reduction in deal numbers and an almost one-third decrease in deal values.
Meanwhile, cross-border M&A activity declined by 13%, although the total transaction value rose by 2%, signaling a possible recovery after consecutive years of decline.
UNCTAD’s findings underline the persistent volatility of global FDI, painting a complex picture as investors navigate evolving conditions across key sectors and regions.
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