GENEVA: Global foreign direct investment (FDI) increased in 2025 after two consecutive years of decline, but the recovery remains narrow, fragile and uneven, according to a new report by the United Nations Conference on Trade and Development.
The agency’s World Investment Report 2026 said global FDI rose by 6 percent to $1.6 trillion last year.
However, the report noted that the recovery was concentrated in a limited number of countries and sectors, with just 20 countries attracting more than 80 percent of global FDI in 2025.
According to the report, investment growth was largely driven by a small number of major projects, particularly infrastructure linked to artificial intelligence (AI). Data centres accounted for the largest share of new project values, followed by investments in oil and gas and semiconductor industries.
Most other sectors, including renewable energy, infrastructure and manufacturing, recorded declines, reflecting continued investor uncertainty, geopolitical tensions, trade policy volatility, rising financing costs and increasing technological competition.
UN Secretary-General António Guterres said the rise in FDI masks significant disparities across countries, regions and sectors.
Developing economies see slower growth
The report found that developed economies accounted for most of the increase in foreign investment.
FDI inflows to developed countries rose by 11 percent in 2025, while developing economies recorded only a 2 percent increase, receiving a combined $901 billion.
Developing Asia remained the world’s largest recipient region, attracting $644 billion in foreign investment. Latin America and the Caribbean received $188 billion, while Africa attracted around $70 billion.
The world’s least developed countries recorded a 21 percent increase in FDI to $43 billion. Despite the rise, these countries accounted for only 2.7 percent of total global investment, with most inflows concentrated in a few resource-rich economies.
Governments take greater role in investment policies
UNCTAD also reported a record 229 investment policy measures introduced by governments in 2025.
While most policies remained favourable to investors, many were designed to attract investment into strategic industries, strengthen domestic economic priorities and address economic security concerns.
The report said the changing global investment landscape offers new opportunities for developing countries but also presents significant challenges, warning that economies unable to compete for capital- and technology-intensive investment risk being left behind.
Comment