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Global foreign direct investment falls for second consecutive year – UNCTAD

04 Jul 2025, 05:03 pm
Financial Nigeria
Global foreign direct investment falls for second consecutive year – UNCTAD

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“Too many economies are being left behind not for a lack of potential – but because the system still sends capital where it’s easiest, not where it’s needed,” said UNCTAD Secretary-General Rebeca Grynspan.

UNCTAD Secretary-General Rebeca Grynspan

Global foreign direct investment (FDI) fell by 11% to $1.5 trillion in 2024, marking the second consecutive year of decline and confirming a deepening slowdown in productive capital flows, according to the World Investment Report 2025 by UN Trade and Development (UNCTAD).  

According to the report, investment dropped sharply across developed economies, particularly in Europe. In developing countries, inflows appeared broadly stable – but this concealed a deeper crisis. In too many economies, capital is stagnating or bypassing entirely sectors that matter the most – infrastructure, energy, technology, and industries that drive job creation.

“Too many economies are being left behind not for a lack of potential – but because the system still sends capital where it’s easiest, not where it’s needed,” said UNCTAD Secretary-General Rebeca Grynspan.

The report noted that the investment landscape in 2024 was shaped by geopolitical tensions, trade fragmentation, and intensifying industrial policy competition. Multinational companies increasingly prioritised short-term risk management over long-term strategies, particularly in sectors sensitive to national security, supply chain reconfiguration, and shifting trade policies.

The decline was largely driven by a 22% drop in FDI to developed economies, including a 58% plunge in Europe. North America bucked the trend with a 23% increase, led by the United States.

Africa saw FDI rise 75%, driven by a single large project in Egypt. Excluding that, inflows still rose 12%, supported by investment facilitation and regulatory reform.

Asia remained the world’s top FDI recipient, despite a modest 3% decline. Countries in Southeast Asia posted a 10% rise, reaching $225 billion — the second-highest level on record.

Latin America and the Caribbean experienced a 12% decline in total flows, though greenfield project announcements rose in key markets such as Argentina, Brazil and Mexico. The Middle East maintained strong inflows, bolstered by economic diversification in the Gulf region.


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