The latest Global Investment Trends Monitor released by UNCTAD shows that global foreign direct investment climbed 14% in 2025, reaching an estimated total of $1.6 trillion. Over $140 billion of this growth stemmed from expanded capital movements via international financial hubs. When excluding these transit capital flows, the annual FDI growth rate settles at just around 5%, demonstrating that fundamental productive investment has seen only a modest uptick.

Financial Transactions Outperform Real Economic Investment

Investor confidence stayed subdued across the whole year. Cross-border merger and acquisition activity dropped 10% in value. International project financing also continued its downward trend for the fourth straight year, with a 16% fall in deal value and a 12% reduction in transaction volume, hitting the lowest level since 2019. Greenfield investment announcements also registered a steep 16% decline. Although a few ultra-large projects propped up overall market value, new overseas grassroots investment projects shrank notably. Overall market performance indicates that the global FDI upturn is mainly fuelled by financial trading activities rather than widespread growth in real industrial investment.

Widening Investment Gap Between Advanced and Emerging Economies

Advanced economies saw a striking 43% surge in FDI inflows, hitting $728 billion, largely boosted by recovery across European markets and major global financial hubs. The European Union achieved a 56% FDI increase, backed by large-scale cross-border acquisitions and economic rebounds in Germany, France, Italy and other member states. In contrast, developing nations faced a 2% drop in inbound FDI to $877 billion, still occupying 55% of the global total. Low-income economies endured the most severe downturn, with three-quarters of the world’s least developed countries recording flat or falling foreign investment inflows.

Digital Infrastructure Reshapes Global Investment Layout

Global capital is increasingly clustering in a small number of high-capital, strategic industrial sectors. In 2025, data centre construction accounted for over one-fifth of all greenfield investment value worldwide, with pledged capital surpassing $270 billion, driven by booming demand for AI and digital infrastructure systems. Semiconductor project investment value rose by 35%. Meanwhile, industries deeply embedded in global value chains and vulnerable to tariff fluctuations, including textiles, electronics and mechanical manufacturing, saw a sharp drop in new project numbers. Major strategic investment projects were concentrated in a limited number of destinations, primarily France, the United States and South Korea, alongside emerging economies such as Brazil, India, Thailand and Malaysia.

Persistent Headwinds for Infrastructure Investment

Domestic capital has partially offset the shortage of cross-border investment in many regions. Nevertheless, UNCTAD warns that this structural shift may exacerbate infrastructure funding gaps in developing regions, which rely heavily on international capital to support large-scale infrastructure construction and developmental initiatives.

Uncertain Prospects and Forward-looking Trends

Should global funding environments keep improving and cross-border corporate deals pick up steam, foreign direct investment may see mild growth in 2026. Even so, UNCTAD forecasts sluggish growth in real-economy investment, held back by geopolitical frictions, unclear regulatory shifts and divided economic blocs. Amid such lingering instability and uneven capital distribution, the international community is exploring ways to coordinate policies, shore up market confidence and guide funds toward tangible productive fields.

Scheduled to take place in Doha in October 2026, the World Investment Forum will centre on the theme of investing for long-term progress. The event will gather government decision-makers, market investors and global organizations to discuss ways to make investment better serve socioeconomic progress, with particular focus on regions and industries suffering the most severe funding shortages. Failure to take effective measures to boost real-sector investment will further push global FDI to gather in limited areas and industries, weakening its role in driving inclusive growth.

With the financial industry leading market revival and global liquidity staying on an upward track, the overall environment for transnational investment has improved notably. Driven by the financial sector’s steady rebound, idle capital will gradually flow into real industries, emerging segments and promising overseas markets. This will unlock dormant investment potential, facilitate closer industrial cooperation and resource integration worldwide, and optimize the current pattern of global capital distribution. Such recovering momentum can mitigate earlier downsides caused by geopolitical shifts, market swings and weak consumption sentiment, and rebuild investment trust among participants across all regions. In the long term, it will unblock global capital circulation, remove multiple investment barriers, deliver steady driving force for world economic operations, and offer richer choices and steady returns for overseas investment arrangements, thereby underpinning steady, balanced and sound long-term expansion of global investment markets.