Global FDI touches $1.4tn in 2024: UNCTAD

Foreign direct investment (FDI) is at a crossroads, according to the latest Global Investment Trends Monitor released by the United Nations Conference on Trade and Development (UNCTAD) on Monday.

In 2024, global FDI saw an 11 per cent increase, reaching an estimated $1.4tn.

However, excluding flows through European conduit economies – which often act as intermediaries before investments reach their final destinations – FDI dropped by 8 per cent.

Moderate growth in FDI in 2025, shows report

The report anticipates moderate growth in global FDI in 2025, driven by improved financing conditions and an increase in mergers and acquisitions (M&A). However, risks and investor uncertainty remain high, clouding the outlook for further expansion.

The UNCTAD report pointed out that multinational transactions in conduit economies were a key factor behind the 43 per cent surge in FDI to developed economies. Without these flows, FDI in developed economies would have dropped by 15 per cent.

FDI to developing countries declined by 2 per cent, presenting challenges to progress on the United Nations’ Sustainable Development Goals (SDGs).

Investments in SDG-related sectors fell by 11 per cent globally in 2024, with fewer projects in key areas such as agrifood systems, infrastructure, and water and sanitation compared to 2015, when the SDGs were adopted.

Greenfield projects see a drop

Greenfield projects involving investments in new ventures saw an 8 per cent drop in number and a 7 per cent decrease in value. Despite these declines, investments in sectors like semiconductors and artificial intelligence (AI) helped maintain the overall value of investments near 2023’s record levels.

International project finance, primarily concentrated in infrastructure, continued its sharp decline. The report highlighted a 26 per cent drop in the number of deals and nearly a third decrease in deal values.

Additionally, cross-border M&A deals fell by 13 per cent, although their total value increased by 2 per cent, suggesting a potential recovery after two years of decline.

UNCTAD’s report underscores global FDI’s continued uncertainty, with a mixed outlook as investors navigate fluctuating conditions in key sectors and regions.

Read: Global trade expected to hit $33tn in 2024: UNCTAD report