Geneva: The United Nations Conference on Trade and Development (UNCTAD) has announced a drop in global foreign direct investment (FDI) value by 11 percent, marking a second year of decline.
According to Emirates News Agency, issued Thursday in Geneva, global FDI rose by 4 percent in 2024, reaching US$1.5 trillion. This increase was partly attributed to volatile financial flows through certain European economies, which serve as investment transit hubs. The report emphasized the pressing need to reform investment and finance systems to promote inclusive and sustainable growth.
The findings come ahead of the Fourth International Conference on Financing for Development, where global leaders will address the growing gap between capital flows and development needs. UNCTAD noted a sharp decline in investment in developed economies, especially in Europe, while flows to developing countries remained relatively stable.
Rebeca Grynspan, Secretary-General of UNCTAD, stated that fragmentation and volatility are distorting investment flows. She noted that the investment environment in 2024 was influenced by geopolitical tensions, trade fragmentation, and increasing competition in industrial policies, all of which, along with heightened financial risks and uncertainties, are reshaping global investment maps and affecting long-term investor confidence.
The report detailed a 22 percent decline in FDI to developed economies, including a steep 58 percent drop in Europe, whereas North America saw a 23 percent increase, primarily driven by the United States.
Regional trends showed that Africa experienced a 75 percent surge in FDI, mainly due to a large project in Egypt. Without this project, inflows rose by 12 percent, aided by investment facilitation and regulatory reforms. Asia remained the top recipient region despite an overall 3 percent decrease, as Southeast Asia recorded a 10 percent rise in FDI, amounting to US$225 billion, the second-highest ever.
Conversely, Latin America and the Caribbean faced a 12 percent reduction in total inflows, although new project announcements increased in key markets like Argentina, Brazil, and Mexico. The Middle East continued to enjoy robust FDI inflows, supported by economic diversification initiatives in the Gulf region.
FDI flows among structurally vulnerable economies varied: they rose by 9 percent in least developed countries (LDCs) and by 14 percent in small island developing states (SIDS), but fell by 10 percent in landlocked developing countries (LLDCs). Across these groups, investment was heavily concentrated in a few countries.