Global FDI fell by 11 pct amid uncertainty: UNCTAD

GENEVA, June 19 (Xinhua) -- Global foreign direct investment (FDI) fell by 11 percent to 1.5 trillion U.S. dollars in 2024, marking the second consecutive year of decline, the United Nations Conference on Trade and Development (UNCTAD) said on Thursday.

Geopolitical tensions, trade fragmentation, and intensifying industrial policy competition, combined with elevated financial risk and uncertainty, are reshaping global investment, the UNCTAD said in its World Investment Report 2025.

The decline was driven largely by a 22 percent drop in FDI to developed economies, including a 58 percent plunge in Europe, the report said.

In developing countries, capital inflows appeared broadly stable with regional divergence. However, in many economies, capital is "stagnating or bypassing" key sectors like infrastructure, energy, technology, and job-creating industries, it highlighted.

"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," said UNCTAD Secretary-General Rebeca Grynspan.

Digital economy investment is the only growth sector, which saw a 14 percent rise in FDI led by Information and Communication technology (ICT) manufacturing, digital services, and semiconductors, the report said.

The report noted steep investment drops in sectors critical to achieving the Sustainable Development Goals (SDG), including renewable energy, transport, and water and sanitation, all with declines by over 30 percent.

Current levels of investment fall far short of global needs, it warned. Closing the SDG financing gap would require an estimated 4 trillion U.S. dollars per year in developing countries, it added.

The report also noted that the escalation of global trade tensions driven by the U.S. "reciprocal tariff" measures, as well as evolving trade negotiations and heightened economic policy uncertainty, have significantly impacted international investment.

Firms are recalibrating cross-border investment strategies, seeking to navigate a more complex and uncertain operating environment, it said.

The report urged increased, long-term and inclusive capital that is aligned with sustainable development, especially in the digital economy sector, to help close the global divide.

The UNCTAD put forward seven priority areas covering data and AI governance, digital investment policy and rules, digital infrastructure, among others, to help developing economies secure transformative FDI in digital industries. ■