UNCTAD – Investment Trends Monitor, Jan 2024

According to the UNCTAD's Investment Trends Monitor, global foreign direct investment (FDI) flows in 2023 reached $1.37 trillion, showing a slight increase of 3% compared to the previous year, despite predictions of a potential recession. This growth was driven by certain European conduit economies, but excluding these, global FDI flows actually decreased by 18%. FDI in the European Union experienced a significant boost, but excluding Luxembourg and the Netherlands, the rest of the EU saw a 23% decrease in FDI inflows. FDI inflows in other developed countries remained stagnant, with no growth in North America and declines in other regions due to economic uncertainties and higher interest rates. Overall, global FDI flows increased slightly in 2023, but excluding certain economies revealed a larger decline in global FDI activity. FDI flows to developing countries decreased by 9%, amounting to $841 billion, with most regions experiencing declining or stagnant flows. Developing Asia saw a 12% decrease in FDI, while Africa witnessed a 1% decrease. Latin America and the Caribbean remained stable, with Central America showing positive growth. International investment project announcements, including greenfield projects, project finance, and cross-border mergers and acquisitions, mostly experienced negative growth. Higher financing costs in 2023 led to a 21% decrease in international project finance deals and a 16% decrease in cross-border mergers and acquisitions. Greenfield project announcements also decreased in number, but their value increased by 6%, particularly in the manufacturing sector, suggesting a potential recovery from a long-term declining trend.