United Nations Conference on Trade and Development (UNCTAD) data shows that global foreign direct investment (FDI) flows rose by 3% to $1.37 trillion in 2023, defying expectations as early-year recession fears receded and financial markets improved.
The report said that global FDI was affected by economic uncertainty and rising interest rates, but that the increase in FDI flows was largely due to higher values in a few European conduit economies. Excluding these channels, flows were down 18%.
The report said that FDI in the European Union jumped from a negative $150 billion in 2022 to $141 billion in 2023 due to large fluctuations in Luxembourg and the Netherlands. Excluding these two countries, flows to the rest of the EU fell by 23%, with declines in many major recipient countries.
The report also noted that FDI flows to developing countries fell by 9% to $841 billion, with flows declining or stagnating in most regions. FDI fell by 12% in developing Asia and by 1% in Africa.
