GENEVA, (Pakistan Point News - 21st Jan, 2025) Foreign direct investment (FDI) is at a crossroads, according to the latest Global Investment Trends Monitor released by UN Trade and Development (UNCTAD) on Monday.
In 2024, global FDI rose 11 percent to an estimated $1.4 trillion but dipped by 8 percent when excluding flows through European conduit economies – which often serve as transfer points for investments before they reach their final destination.
According to the UNCTAD report, FDI is expected to grow moderately in 2025, driven by improved financing conditions and increased mergers and acquisitions (M&A), though risks and investor uncertainty remain high.
The report highlighted that multinational transactions in conduit economies fuelled a 43 percent surge in developed economies. Without them, flows dropped 15 percent.
FDI to developing countries declined 2 percent posing challenges progress on the Sustainable Development Goals (SDGs).
Investments in SDG-related sectors dropped 11 percent globally in 2024, with fewer projects in agrifood systems, infrastructure, and water and sanitation compared to 2015, when the goals were adopted.
Greenfield projects fell 8 percent in number and 7 percent in value, though investments in semiconductors and AI kept values near 2023's record.
International project finance, concentrated in infrastructure, continued to fall sharply. Deals dropped 26 percent in number, with values down nearly a third.
The report added that cross-border M&A deals fell 13 percent, but total values rose 2 percent, signalling a potential recovery from a two-year downward trend.