In January 2025, the United Nations Conference on Trade and Development (UNCTAD) reported in its Global Investment Trends Monitor 2024 that global foreign direct investment (FDI) increased by 11%, reaching an estimated USD 1.4 trillion in 2024. However, FDI declined by 8% when excluding flows through European conduit economies.
The decline in FDI poses a risk to the progress of the Sustainable Development Goals (SDGs), which depend on international project financing.
FDI in India grew by 13%, with an increase in both the number and value of greenfield project announcements.
Highlights of the report:
i.FDI in developing countries declined for the second consecutive year, dropping by 2%, in Central and West Asia as well as South America.
ii.FDI to developing Asia declined by 7%, with China’s inflows dropping 29% for the second consecutive year.
iii.Association of Southeast Asian Nations (ASEAN) FDI rose 2% to a record USD 235 billion,
iv.Global investments in Sustainable Development Goals (SDG)-related sectors fell by 11% in 2024, with a decline in the number of projects in agrifood systems, infrastructure, and water and sanitation compared to 2015.
v.In Europe, FDI dropped by 45% excluding conduit economies, with 18 of 27 member states experiencing declines. Notable decreases included Germany (-60%), Italy (-35%), Spain (-13%), and France (-6%).
vi.The United States of America (USA) and India experienced significant growth in manufacturing projects, hitting record levels.
In India, semiconductor and basic metals projects were key drivers of this increase.
Global trends:Â
i.Greenfield projects decreased by 8% in number and 7% in value, although investments in semiconductors and Artificial Intelligence (AI) showed growth from 2023.
ii.International project finance continued to decline, with the number of deals dropping by 31% and the value decreasing by 26%.
iii.Cross-border Mergers and Acquisitions (M&A) activity declined by 13% in deal numbers, but total deal values rose by 2%, indicating a possible recovery from the past two years’ decline.
Key points:
i.International project finance: Announcement of large-scale projects involving multiple investors, often with a significant debt component. These projects typically focus on infrastructure sectors, making them highly relevant for investments aimed at achieving the Sustainable Development Goals (SDGs).
ii.Greenfield projects: Announcement-based data that reflect investment intentions for the reporting year, providing insight into future FDI trends. These projects primarily focus on industrial sectors.
iii.Cross-border M&As:Â Transactions that directly impact FDI flows by involving the acquisition or merging of companies across national borders.
About United Nations Conference on Trade and Development (UNCTAD):
Secretary-General – Rebeca Grynspan
Headquarters – Geneva, Switzerland
Founded – 1964
