- Foreign direct investment rose 14% in 2025 to $1.6 trillion, rebounding after two weak years.
- Most of the increase came from financial flows through global hubs, not new productive investment.
- FDI to developed economies surged, while flows to developing countries declined.
- Investment is becoming more concentrated in a few capital-intensive sectors such as data centres.
- Underlying investment activity critical for development remains fragile.
© Shutterstock/Aerovista Luchtfotografie | A data centre in Eemshaven, the Kingdom of the Netherlands.
Global foreign direct investment (FDI) increased by 14% in 2025 to an estimated $1.6 trillion, according to UN Trade and Development (UNCTAD) in its the latest Global Investment Trends Monitor.
More than $140 billion of the increase came from higher flows through global financial centres. Excluding these conduit flows, global FDI rose by only about 5%, highlighting how limited the recovery remains in underlying investment.
Financial activity outpaces real investment
Investor sentiment indicators remained weak throughout the year. The value of international mergers and acquisitions fell by 10%, while international project finance declined for a fourth consecutive year, dropping 16% in value and 12% in deal numbers to levels last seen in 2019.
Greenfield project announcements (new, from-scratch foreign investment projects) also fell sharply, down 16% despite high total values driven by a small number of mega-projects. The overall picture points to a rebound driven more by financial transactions than by broad-based investment expansion.
Developed economies pull ahead
FDI flows to developed economies jumped 43% to $728 billion, driven by Europe and financial hubs. The European Union recorded a 56% increase, supported by large cross-border acquisitions and a rebound in economies including Germany, France and Italy.
By contrast, flows to developing economies declined by 2% to $877 billion, accounting for 55% of global FDI. Lower-income countries were hit hardest, with three quarters of least developed countries experiencing stagnant or declining inflows.
Data centres reshape investment patterns
Investment is becoming increasingly concentrated in a handful of strategic, capital-intensive sectors. Data centres accounted for more than one fifth of global greenfield project values in 2025, with announced investment exceeding $270 billion, driven by demand for AI infrastructure and digital networks.
Semiconductor project values rose 35%, while project numbers fell sharply in tariff-exposed, global value-chain-intensive sectors such as textiles, electronics and machinery.
Major projects were concentrated in a small number of host countries, led by France, the United States and the Republic of Korea, with emerging markets such as Brazil, India, Thailand and Malaysia also attracting large investments.
Infrastructure investment remains under pressure
International infrastructure investment fell by 10% in 2025, largely due to a sharp pullback in renewable energy projects as investors reassessed revenue risks and regulatory uncertainty.
Domestic investors increasingly filled part of the gap, but UNCTAD highlights the risk that this shift could widen investment shortfalls in countries that rely on international finance for large-scale infrastructure and development-related projects.
A fragile outlook, and what comes next
FDI flows could increase modestly in 2026 if financing conditions continue to ease and cross-border mergers and acquisitions recover. But UNCTAD expects real investment activity to remain subdued, weighed down by geopolitical tensions, policy uncertainty and economic fragmentation.
Against this backdrop of persistent uncertainty and increasingly fragmented investment flows, attention is now turning to how global policy dialogue can help restore confidence and redirect capital toward more productive uses. In October 2026, the World Investment Forum will convene in Doha under the theme “Investing in the Future”, bringing policymakers, investors and international institutions together to focus on how investment can better support development outcomes, particularly in countries and sectors where financing gaps are most acute.
Without action to revive productive investment, global FDI risks becoming more concentrated in a few regions and sectors, limiting its contribution to development.