Global FDI Hits $1.4 Trillion in 2024, UNCTAD Reports

Global foreign direct investment (FDI) saw an 11% increase in 2024, reaching an estimated $1.4 trillion, according to the latest Global Investment Trends Monitor by the United Nations Conference on Trade and Development (UNCTAD).

However, this figure drops by 8% when excluding investments funneled through European conduit economies, which often act as transit points for funds.

The report predicts moderate FDI growth in 2025, supported by improved financing conditions and increased mergers and acquisitions (M&A). Despite this, risks and investor uncertainties remain high.

FDI to developed economies surged by 43%, driven largely by transactions in conduit economies. Excluding these flows, FDI to developed economies fell by 15%. Developing countries saw a 2% decline, raising concerns about achieving Sustainable Development Goals (SDGs). Investments in SDG-related sectors, including agrifood systems, infrastructure, and water and sanitation, dropped 11% compared to 2015 levels.

Greenfield projects, which represent new investments, declined 8% in number and 7% in value. Despite this, sectors like semiconductors and artificial intelligence kept overall values near record highs. Meanwhile, international project finance, primarily in infrastructure, saw significant drops, with a 26% reduction in the number of deals and a nearly one-third decline in value.

Cross-border M&A deals also fell by 13%, though their total value rose 2%, signalling a potential recovery after two years of decline.

While challenges persist, the report underscores the importance of fostering investment in sustainable and high-growth sectors to ensure long-term global economic resilience.

News Source: Emirates News Agency