Global FDI Weakened in 2023: Insights and Prospects for 2024

Global Foreign Direct Investment (FDI) faced challenges in 2023, marked by geopolitical crises and interest rate concerns, as per a recent report from the United Nations Conference on Trade and Development (UNCTAD). Despite reaching $1.37 trillion, a 3% increase from 2022, developing countries experienced a contraction.

In 2024, the outlook for FDI-supporting banks and financial institutions remains uncertain. UNCTAD notes a significant impact on international project finance and M&A, with a 21% and 16% decrease in deals, respectively.

The United States saw a 3% decline in FDI, while the European Union witnessed a surge due to fluctuations in Luxembourg and the Netherlands. China’s FDI declined by 6%, with an 8% increase in greenfield project announcements. India’s FDI fell by 47%, but stable project announcements may sustain its status.

Southeast Asia faced a 16% decline in FDI within the ASEAN bloc, but a 37% increase in greenfield projects, notably in Vietnam, Thailand, Indonesia, Malaysia, the Philippines, and Cambodia. The UAE reported a 28% rise in greenfield announcements, and Saudi Arabia saw a notable 63% increase. FDI in Africa remained flat, and Brazil reported a 22% decline in Latin America.