Global FDI up 11 percent to $1.4 trillion in 2024, moderated growth expected in 2025 amid risks

The United Nations Conference on Trade and Development (UNCTAD) recently released the "Global Investment Trends Monitor," which indicates that foreign direct investment (FDI) is at a crucial juncture. The report reveals the complex dynamics of global FDI in 2024, providing important clues for future investment trends.

In 2024, global foreign direct investment is estimated to reach $1.4 trillion, an 11% increase year-on-year. However, if we exclude capital flows through European conduit economies (which typically serve as transit points before reaching the final investment destination), global FDI actually decreased by 8%. This difference highlights the complexity and regional variations in global investment flows.

The UNCTAD report forecasts a moderate increase in foreign direct investment in 2025, mainly driven by improved financing conditions and increased merger and acquisition activity. Nevertheless, the risks and uncertainties faced by investors remain high. The report emphasizes that transactions by multinational corporations in conduit economies led to a significant 43% increase in investment in developed economies, while excluding these conduit flows shows a 15% decrease in investment instead.

Foreign direct investment inflows to developing countries decreased by 2%, posing a challenge to the advancement of the Sustainable Development Goals (SDGs). Globally, investments in industries related to the SDGs decreased by 11% in 2024. Compared to 2015 (the year the SDGs were established), investments in related projects such as agri-food systems, infrastructure, and water and sanitation facilities have all decreased.

Additionally, the number of greenfield projects decreased by 8%, and their value decreased by 7%. However, investments in the semiconductor and artificial intelligence sectors remained close to the record levels of 2023. International project financing (mainly concentrated in infrastructure) continued to decline sharply, with the number of transactions decreasing by 26% and the total value decreasing by nearly one-third. Cross-border merger and acquisition transactions decreased in number by 13%, but their total value increased by 2%, indicating a possible recovery from a two-year downward trend.