Global foreign investment down 3% in first half of 2025

​​​​​​​By Gokhan Ergocun

ISTANBUL (AA) - Global foreign direct investments (FDIs) posted a yearly decline of 3% during the first half of 2025, amid trade tensions, geopolitical risks, high interest rates and regional conflicts, according to the UN Trade and Development (UNCTAD).

It said the drop was driven by developed economies, where cross-border mergers and acquisitions -- which normally make up a large share of their FDI -- fell 18% to $173 billion.

Developing economies fared better overall, with flows remaining flat; but trends diverged by region, said UNCTAD, adding that inflows rose 12% in Latin America and the Caribbean, and 7% in developing countries in Asia. They fell 42% in Africa.

High borrowing costs, related to interest rates, and economic uncertainty continued to hit investment in industry and infrastructure in the first half of 2025, said UNCTAD.

"Announcements of greenfield projects – when firms build new operations abroad – fell 17% in number, driven by a 29% decline in supply-chain-intensive manufacturing such as textiles, electronics and automotive, amid tariff uncertainty," it added.

International project finance, critical for infrastructure development, also posted a decrease, with deal numbers down 11% and value 8%.

The report showed that despite fewer projects, the value of global greenfield investment rose 7%, propelled by major projects in artificial intelligence (AI) and the digital economy.