Global FDI Decline: Geopolitical Tensions Persist
The United Nations agency for trade and development reports a continued decline in global foreign direct investment in 2024, amid geopolitical tensions. FDI fell by 11%, excluding European conduits. UNCTAD's negative 2025 outlook highlights concerns over reduced investment and a focus on short-term risk management.
Global foreign direct investment has experienced a downturn for two years in a row, according to a United Nations report released on Thursday. The agency linked the 11% decline in 2024, excluding some European conduit economies, to escalating trade tensions impacting investor confidence.
UNCTAD Secretary-General Rebeca Grynspan highlighted the negative effects of geopolitical tensions and trade fragmentation, describing them as damaging to investor morale. "We are more concerned about 2025 as investment stalls," she stated, noting the focus on short-term risk management.
The report paints a bleak future for international investment in 2025, with early data for the first quarter showing record low deal activity. While some regions like North America and Southeast Asia saw rises in FDI, much of this investment remains unproductive, lacking significant impact on job creation and infrastructure.
(With inputs from agencies.)
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