Translation. Region: Russian Federation –
Source: United Nations – United Nations –
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January 21, 2026 Economic development
Global foreign direct investment (FDI) flows will grow by 14 percent in 2025, reaching $1.6 trillion, according to a preliminary report published Wednesday by the United Nations Conference on Trade and Development (UNCTAD). Growth has resumed after a two-year decline, but the report's authors emphasize that the impressive figures mask a fragile reality.
There is growth, but recovery is limited
A significant portion of the increase was attributed to transactions passing through global financial centers. More than $140 billion of the total increase was attributed to these "transit flows." Without them, real FDI volumes would have grown by only about five percent, indicating a weak recovery in underlying investment activity.
Key indicators of investor sentiment remained low. The volume of international mergers and acquisitions fell by 10 percent. Financing for international project initiatives fell by 16 percent in value and 12 percent in number of deals—this is the fourth consecutive year of decline, reaching 2019 levels. The number of announced greenfield projects—new greenfield investments—fell by 16 percent, with only a few megaprojects delivering strong overall performance.
The gap between developed and developing countries is growing
FDI flows to developed economies jumped 43 percent to $728 billion, driven by Europe and its financial hubs. In the European Union, growth was 56 percent, driven by large cross-border transactions and a recovery in economies such as Germany, France, and Italy.
In contrast, investment in developing countries fell by two percent to $877 billion. Least developed countries were particularly hard hit: in three-quarters of them, FDI inflows either stagnated or declined.
Money goes into technology, not sustainable development
The report documents a growing concentration of investment in capital-intensive and technology-based sectors. Data centers accounted for more than one-fifth of the global greenfield project value in 2025—over $270 billion. Demand was driven by the development of artificial intelligence infrastructure and digital networks. The largest host countries were France, the United States, and the Republic of Korea, with notable projects also emerging in Brazil, India, Thailand, and Malaysia.
New investment in semiconductor manufacturing increased by 35 percent. At the same time, the number of projects fell sharply – by 25 percent – in sectors dependent on global value chains and exposed to tariff risks, such as textiles, electronics, and mechanical engineering.
Experts note that despite the overall growth, such investments have a limited impact on the local economy. Policymakers are advised to more closely link digital infrastructure with the development of skills, innovation, and local added value.
Infrastructure and green energy under pressure
International infrastructure projects declined by 10 percent. The main reason was a sharp decline in investment in renewable energy amid a reassessment of profitability risks and regulatory uncertainty. Domestic investors have begun to play an increasingly important role, but this could widen the gap in countries dependent on external financing for large projects.
Forecast for 2026
As UNCTAD experts note, it is difficult to predict how events will unfold in 2026. With easing financial conditions and a revival of cross-border transactions, FDI could increase slightly. However, according to the report's authors, actual investment activity will be constrained by geopolitical tensions, policy uncertainty, and global economic fragmentation. Without coordinated measures, global investment risks becoming concentrated in just a few regions and sectors.
Please note: This information is raw content obtained directly from the source. It represents an accurate account of the source's assertions and does not necessarily reflect the position of MIL-OSI or its clients.