Global foreign direct investment (FDI) dropped 11 percent in 2024, marking the second year of decline and underscoring growing concerns over volatility and fragmentation in international capital flows, according to the United Nations Conference on Trade and Development (UNCTAD).
Released Thursday in Geneva, UNCTAD’s World Investment Report 2025 noted that despite a 4 percent rise in global FDI to $1.5 trillion last year, the increase was driven largely by transient financial flows through European investment hubs — masking underlying weaknesses in long-term investment trends.
The report warned that geopolitical tensions, trade fragmentation, and intensifying industrial policy competition are reshaping the global investment landscape, eroding investor confidence and deepening disparities between developed and developing markets.
Developed economies saw FDI fall sharply by 22 percent, with Europe experiencing a dramatic 58 percent plunge. North America stood out with a 23 percent rise, led by inflows into the United States.
FDI to developing countries held relatively steady. Asia remained the top recipient despite a slight 3 percent decline, while Southeast Asia posted a 10 percent rise. Africa recorded a 75 percent surge, primarily due to a major project in Egypt, while Latin America and the Caribbean saw a 12 percent drop.
In the Middle East, investment remained strong, bolstered by Gulf nations’ economic diversification initiatives. Structurally vulnerable economies showed mixed results: FDI rose in least developed countries and small island states but fell in landlocked developing nations.
UNCTAD emphasized the need to reform global investment frameworks to support sustainable development, ahead of the upcoming Fourth International Conference on Financing for Development, where world leaders will address growing financing gaps.
News Source: Emirates News Agency
