Global Foreign direct investment (FDI) rose 11% to $1.4 trillion in 2024 but fell 8% when excluding flows through European conduit economies, which often serve as transfer points before investment flows reach their final destination.
Multinational transactions in conduit economies fueled a 43% surge in developed economies. Without them, flows dropped 15%.
FDI to developing countries declined 2%, marking a second consecutive annual fall for the Global South and challenges progress on the Sustainable Development Goals (SDGs), which rely heavily on international project finance.
Investments in SDG-related sectors dropped 11% globally in 2024, with fewer projects in agrifood systems, infrastructure, and water and sanitation compared to 2015, when the goals were adopted.
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.
Global trends: Project finance plummets, greenfield investment remains weak and M&As stable
- Greenfield projects fell 8% in number and 7% 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% in number, with values down nearly a third.
- Cross-border M&A deals fell 13%, but total values rose 2%, signaling a potential recovery from a two-year downward trend.
Developed economies: Flows decline in Europe but climb in North America
- FDI in Europe fell 45%, excluding conduit economies. In the EU, 18 of 27 member States saw declines, including Germany (-60%), Italy (-35%), Spain (-13%) and France (-6%).
- North America saw a 13% rise in FDI, driven by a 10% increase in the United States, mostly due to higher M&A values (80% increase).
- Greenfield project announcements fell 10%, with 1,000 fewer projects than in 2023. Germany, Poland and France saw notable declines, while North America’s greenfield project announcements rose 20%.
- The overall value of greenfield projects rose 15%, driven by megaprojects in semiconductors. The US recorded a 93% increase, reaching $266 billion, while the United Kingdom saw a 32% rise to $85 billion and Italy a 71% jump to $43 billion.
- International project finance deals dropped 29%, continuing the downward trend from 2023.
Developing economies: FDI falls in Asia and Latin America but rises in Africa
- Greenfield investment announcements in developing economies fell 6% in number and 24% in value. Africa and Asia saw the largest declines, losing nearly 200 and 150 projects, respectively.
- International project finance deals dropped 23% in number and 33% in value, led by fewer deals in Asia. Major emerging markets like Brazil, China, India, Indonesia and Mexico experienced sharper declines than the global average.
- FDI to developing Asia fell 7%, with China’s inflows dropping 29% for a second year, now 40% below their 2022 peak. India saw a 13% rise in FDI and growth in greenfield project announcements. ASEAN’s FDI increased 2% to a record $235 billion.
- Africa’s FDI inflows surged 84% to $94 billion, driven by a megaproject in Egypt’s Ras El-Hekma peninsula. Excluding this, the continent’s FDI rose 23% but remained modest at $50 billion.
- Latin America and the Caribbean’s FDI fell 9%, partly due to lower energy prices. Brazil’s FDI dropped 5%, but the country saw greenfield project numbers and values rise, along with Brazil, Argentina and Colombia, signaling potential future inflows.
- In Central America, Mexico’s FDI rose 11%, despite weaker project announcements regionally.
