Rising trade tensions, political uncertainty, and geopolitical divisions threaten to further worsen the investment environment, the United Nations Conference on Trade and Development (UNCTAD) said , revealing that global foreign direct investment (FDI) is projected to reach $1.5 trillion in 2024, down 11%year-over-year.
According to its World Investment Report 2025 , the international organization noted that this decline in FDI represented the second consecutive contraction.
The analysis projected that the outlook for 2025 is negative , due to a greater number of countries introducing controls on these flows, under the guise of national security.
“While moderate growth seemed possible at the beginning of the year, trade tensions have led to downward revisions in most indicators of FDI prospects, including gross domestic product (GDP) growth, capital formation, exports of goods and services, currency and financial market volatility, and investor confidence,” the report detailed.
The report explained that in Latin America and the Caribbean , FDI flows decreased by 12%, partly due to the decline in energy prices in 2024.
“In Brazil, the largest recipient in the region, FDI fell by 8 percent. However, several countries in the region, such as Argentina, Brazil, and Mexico, saw an increase in the number and value of announced greenfield (new construction) projects , in contrast to the general trend in developing countries,” he said.
He added that Central America experienced modest growth, with Mexico leading the way thanks to investments in the manufacturing and logistics sectors.
According to the report, Mexico stood out as one of the 10 countries that capture 80% of the investment in new areas of the digital economy , with a 5% share, or $29 billion, in the 2020-2024 period.
The report also highlighted that the United States remains both the largest source and destination of FDI, although Asian economies have taken a greater role as global investors. However, foreign capital inflows to China fell 29% for the second consecutive year.
The United States increased its FDI inflows to $279 billion, an annual increase of 19.6 percent. Meanwhile, in Europe , it fell by 11%, to $198 billion.
UNCTAD noted that while US-led tariffs have led to some announcements of investment projects aimed at restructuring supply chains in manufacturing sectors, their main effect has been a dramatic increase in investor uncertainty.
Given the global economic slowdown, the organization considered it necessary to increase and direct investments toward sustainable infrastructure, digital inclusion, renewable energy, and productive sectors.
Among other factors, he recommended reforming the international financial system, strengthening multilateral cooperation to manage global risks, and expanding sustainable finance.
Comment and follow us on X: @GrupoT21
