Hopes of a post-pandemic recovery in foreign direct investment, and a potential return to FDI boom times, have been dashed once again. This is according to the World Investment Report 2024 by UN Trade and Development, a seminal source of annual FDI data which was released in June. Courtney Fingar as published in Forbes.
In 2023, global FDI flows fell by 2%, down to $1.3 trillion, largely due to trade and geopolitical tensions amid a decelerating global economy. The UN report presents a rather gloomy picture of international investment’s current fragile and fragmented state.
In reality, the situation is even worse than these headline figures suggest. If few key conduit economies in Europe are excluded, the global drop in FDI would be more than 10%.
International project finance and cross-border mergers and acquisitions were particularly weak in 2023. M&As dropped by 46% in value. Project finance, which is crucial for infrastructure investment, decreased by 26%. The main reasons for these declines were tighter financing conditions, investor uncertainty, financial market volatility, and increased regulatory
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