Global foreign direct investment (FDI) fell by 11% to US$1.5 trillion in 2024, marking the second straight year of decline.

The UN Trade & Development’s (UNCTAD) World Investment Report 2025 shows. 

The World Investment Report calls for “bold, coordinated action to redirect investment towards sustainable and inclusive development”. There is a sharp focus on bridging divides in the digital economy, infrastructure, and sustainable finance.

Secretary-General of UN Trade and Development Rebeca Grynspan says investment is more than just capital flows and project pipelines. 

“It’s a signal of where we’re placing our bets as a society,” Grynspan says.

While the overall data shows a 4% rise, the World Investment Report 2025 notes it masks deep underlying weaknesses. The apparent growth was inflated by volatile financial conduit flows through several European economies, which often serve as transfer points for investments.

“Modest growth seemed possible at the start of the year, but escalating trade tensions, geopolitical fragmentation and economic volatility have led to sharp downward revisions of most FDI prospects,” UNCTAD reports.

These include GDP growth, capital formation, trade flows, financial market stability and investor confidence. 

The US remains both the top source and destination for FDI. Notably, five Asian economies rank among the top 10 sources of FDI outflows, underscoring the region’s key role as a global investor. Luxembourg rounds out the top five with Canada in sixth place.

Europe has been the hardest hit region, with inflows down 58% in 2024. FDI fell in more than half of EU countries, with sharp declines in Germany (-89%), Spain (-39%), Italy (-24%) and France (-20%).

In developing economies, regional trends diverged:

Africa saw FDI rise 75%, driven by a single large project in Egypt. Excluding that, inflows still rose 12%, supported by investment facilitation and regulatory reform.

Asia remained the world’s top FDI recipient, despite a modest 3% decline. Countries in Southeast Asia posted a 10% rise, reaching $225 billion — the second-highest level on record.

Latin America and the Caribbean experienced a 12% decline in total flows, though greenfield project announcements rose in key markets such as Argentina, Brazil and Mexico.

The Middle East maintained strong inflows, bolstered by economic diversification in the Gulf region.

Among structurally vulnerable economies, FDI flows were mixed. Inflows rose in least developed countries (+9%) and small island developing states (+14%) but fell 10% in landlocked developing countries. In all three groups, investment remained highly concentrated in just a few countries.

Early 2025 data shows record-low deal and project activity.

Greenfield investments – where companies build new facilities abroad – rose in number but fell 5% in value. The total announced investment remains historically high at US$1.3 trillion.

Cross-border mergers and acquisitions rose 14% to US$443 billion but remained below the average of the past decade. 

“Deals are increasingly shifting to regional markets amid tighter regulations and geopolitical tensions,” the report says.

International project finance, which is a key source of funding for infrastructure, dropped 26%, continuing a multi-year slump.  The least developed countries were hit hardest.

UNCTAD says despite the headline rise in FDI in 2024, there are concerns around declining flows and growing imbalances.

High borrowing costs and exchange rate volatility continue to deter long-term infrastructure investment, especially in the least developed countries.

And multinationals are restructuring supply chains towards Southeast Asia, Eastern Europe, and Central America – a shift that began during the pandemic and is accelerating, UNCTAD’s report adds.

“Too many economies are being left behind not for lack of potential – but because the system still sends capital where it’s easiest, not where it’s needed,” says Grynspan. 

“But we can change that. If we align public and private investment with development goals and build trust into the system, domestic and international markets will bring scale, stability and predictability, and today’s volatility can become tomorrow’s opportunity.”

UNCTAD supports developing countries to access the benefits of a globalised economy more fairly and effectively. It seeks to equip them to deal with the potential drawbacks of greater economic integration. To do this, UNCTAD provides analysis, facilitates consensus-building, and offers technical assistance. 

In 2024, the United Nations Conference on Trade and Development rebranded as UN Trade and Development, adopting a clearer and more impactful visual identity to better communicate our work and values to global audiences.