UNCTAD Global Investment Trends Monitor Report:
The United Nations Conference on Trade and Development (UNCTAD) has released its Global Investment Trends Monitor for 2024, reporting an 8% decline in global Foreign Direct Investment (FDI).
- This threatens funding for critical sectors like infrastructure and renewable energy which are essential for achieving the Sustainable Development Goals (SDGs).
Highlights of the Global Investment Trends Monitor for 2024 Report:
- Global Foreign Direct Investment (FDI) flows increased by 11% reaching about USD 1.4 trillion in 2024. However, when excluding flows through European conduit economies, FDI decreased by around 8%.
- Conduit economies are countries that allow financial flows to be diverted to other countries for tax avoidance. Eg: Ireland, Luxembourg, the Netherlands, Switzerland and the UK.
- FDI into developed economies surged by 43%, driven primarily by multinational transactions passing through conduit economies.
- FDI flows to developing economies declined by 2% in 2024, following a 6% drop in 2023.
- FDI in Europe dropped 45% (excluding conduit economies) but North America saw a 13% rise.
- Greenfield project announcements in developed economies fell by 10%, but the value of greenfield projects rose by 15%, mainly due to semiconductor megaprojects.
- Greenfield investment announcements decreased by 6% in number.
- Africa and Asia saw the largest declines in greenfield project numbers, with nearly 200 fewer projects in Africa and 150 fewer in Asia.
- It also declined in Latin America and the Caribbean.
- FDI in Africa surged by 84% to USD 94 billion, mainly driven by a large project in Egypt.
- FDI in Central America has increased.
- FDI flows to developing Asia decreased by 7%, with China experiencing a 29% decline, while ASEAN saw a 2% increase and India saw a 13% rise.
- India experienced growth in greenfield projects. The international project finance in India dropped by 23% in number and 33% in value.
- Investments in sectors related to the SDGs, including infrastructure, agrifood systems, and water and sanitation, decreased by 11% in 2024.
- Renewable energy project finance slowed, with international deals down 16%, and domestic finance down 60%.
