Global Foreign Direct Investment Rose By 4% In 2024 To Reach USD 1.5 Trillion, Reports UNCTAD

The United Nations Conference on Trade and Development (UNCTAD) has reported an 11 percent drop in global foreign direct investment (FDI) value, marking the second consecutive year of decline. According to the World Investment Report 2025, released Thursday in Geneva, global FDI rose by 4 percent in 2024, reaching US$1.5 trillion. This increase was partly due to volatile financial flows through several European economies that often serve as investment transit hubs.

Rebeca Grynspan, Secretary-General of UNCTAD, highlighted that fragmentation and volatility are distorting investment flows. She noted that geopolitical tensions, trade fragmentation, and competition in industrial policies shaped the investment landscape in 2024. These factors, along with elevated financial risks and uncertainty, are redrawing global investment maps and affecting long-term investor confidence.

The report revealed a significant 22 percent decline in FDI to developed economies, with Europe experiencing a steep 58 percent drop. However, North America saw a 23 percent increase, led by the United States. In contrast, Africa experienced a remarkable 75 percent surge in FDI due to a large project in Egypt. Excluding this project, inflows still rose by 12 percent thanks to investment facilitation and regulatory reforms.

Asia continued to lead as the top recipient region for FDI despite a slight overall decline of 3 percent. Southeast Asia recorded a notable 10 percent increase in FDI to US$225 billion — the second-highest level on record. Meanwhile, Latin America and the Caribbean experienced a 12 percent decrease in total inflows. However, new project announcements increased in key markets like Argentina, Brazil, and Mexico.

FDI flows among structurally vulnerable economies showed varied trends: least developed countries (LDCs) saw a 9 percent rise; small island developing states (SIDS) experienced a 14 percent increase; however, landlocked developing countries (LLDCs) faced a 10 percent decline. Across these groups, investments were concentrated in only a few nations.

The Middle East maintained robust FDI inflows supported by economic diversification efforts within the Gulf region. The report emphasised that reshaping investment and finance systems is crucial for fostering inclusive and sustainable growth globally.

The findings come ahead of the Fourth International Conference on Financing for Development. This event will gather world leaders to address the growing gap between capital flows and development needs.

With inputs from WAM