Global Foreign Direct Investment Sees Rebound in 2025, but Challenges Remain
GENEVA: The United Nations has announced a rise in worldwide foreign direct investment (FDI) for 2025, marking a turnaround after two years of decline. However, officials are cautioning that this recovery is not robust and varies significantly across different countries and sectors.
According to the UN Conference on Trade and Development (UNCTAD), FDI increased by 6.0% last year, totaling $1.6 trillion. Despite this growth, the UN’s World Investment Report 2026 points out that the surge was heavily concentrated in just 20 nations, which attracted more than 80% of the global FDI.
The report highlights that while some sectors experienced growth, most others saw limited activity. Factors such as uncertainty among investors, geopolitical tensions, and fluctuating trade policies, along with rising costs and competition in technology, contributed to subdued investment levels in many areas.
UN Secretary-General Antonio Guterres emphasized in his foreword that although the FDI growth appeared positive, it masked significant fragility and inequality among various regions and sectors. He noted that the expansion was largely fueled by a few large projects, particularly those related to infrastructure and artificial intelligence.
The report identified that the most substantial growth came from investments in data centers, followed by the oil and gas industry and semiconductor manufacturing. In contrast, other sectors like renewable energy, infrastructure, and manufacturing faced declines, highlighting the narrow scope of this economic recovery.
Wealthy nations experienced most of the FDI growth, with investments in developed countries increasing by 11% in 2025. Meanwhile, developing economies saw a modest rise of 2%, securing $901 billion in total. Even though developing countries accounted for over half of global FDI, the distribution remains uneven.
Among regions, developing Asia attracted the highest amount of FDI at $644 billion, while Latin America and the Caribbean saw an increase of 14% to reach $188 billion. Africa received about $70 billion, and the world’s poorest nations experienced a 21% rise in inflows to $43 billion, though this figure still accounts for only 2.7% of global FDI and is concentrated in a few resource-rich countries.
Additionally, UNCTAD reported that governments are actively working to influence investment flows, with a record 229 new investment policy measures introduced last year. While many of these policies favor investors, some aim to attract investments in crucial sectors and enhance domestic economic priorities.
The report suggests that the evolving investment landscape may offer new opportunities for developing nations. However, it also warns that many of these countries risk falling behind as investments become more technology-driven and capital-intensive, influenced by policies that they may struggle to implement.
