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A measure of foreign direct investment in Europe sank to a nine-year low in 2024

Still, there were some bright spots in the report, notably with Spain recording a 15% increase in projects last year to become the fourth-largest European hub for foreign investment

  • Hotznplotzn@lemmy.sdf.orgEnglish
    4·
    20 days ago

    Nice poll, but FDIs and other investments are a bit more complex, especially when facing the current uncertainties in global economies.

    This is also what the Global Investment Trends Monitor by UNTAD says.

    TLDR:

    • In 2024, global FDI rose 11% to an estimated $1.4 trillion but dipped by 8% when excluding flows through European conduit economies – which often serve as transfer points for investments before they reach their final destination – reflecting a world grappling with shifting economic dynamics and persistent uncertainties.

    • Developed economies experienced sharp contrasts. North America saw a 13% rise in FDI, driven by an 80% increase in US mergers and acquisitions (M&A). The value of greenfield projects – new investments in foreign markets – surged 93% in the US, reaching $266 billion, spurred by semiconductor megaprojects. The United Kingdom also saw a 32% increase in greenfield investments to $85 billion, and Italy posted a remarkable 71% jump to $43 billion.

    • In Europe, FDI fell 45% when excluding conduit economies, with 18 out of 27 European Union countries seeing drops. Germany’s FDI plunged 60% and Italy’s fell 35%. Even greenfield investments, vital for future growth, dropped 10% across Europe, though the region saw a 15% rise in total project value, signaling the significance of a few large-scale projects.

    • Asia saw inflows decline by 7%. China faced a 29% drop, now 40% below its 2022 peak. In contrast, India recorded a 13% increase in FDI, boosted by growth in greenfield project announcements. Meanwhile, ASEAN countries (Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Viet Nam) saw modest growth, with FDI increasing 2% to a record $235 billion.

    • In Latin America and the Caribbean, FDI declined by 9%, with Brazil’s inflows falling 5%. However, greenfield project numbers and values rose in Brazil, Argentina and Colombia, signaling potential future recovery. Mexico’s FDI rose 11%, despite weaker regional project announcements, showing resilience in the face of broader challenges.

    • Africa stood out, recording an 84% surge in FDI to $94 billion, largely due to a single megaproject in Egypt. Excluding this project, the continent’s FDI rose 23%, though the overall figure remained modest at $50 billion.

    According to its report, UNCTAD expects moderate global FDI growth in 2025, supported by improved financing conditions and renewed M&A activity, but says that “risks and uncertainties – including geopolitical tensions and global economic instability – pose significant challenges.”