Global foreign direct investment in 2024 fell by 11% to around USD 1.5 trillion (approximately MYR 6.38 trillion), marking the second consecutive year of decline.
According to Xinhua News Agency, the United Nations Conference on Trade and Development (UNCTAD) released the "2025 World Investment Report" on the 19th, highlighting that geopolitical tensions, trade fragmentation, intensified industrial policy competition, and rising financial risks and uncertainties are reshaping the global investment landscape.
The report shows that last year's decline in global foreign direct investment was largely due to a 22% drop in foreign direct investment inflows to developed economies, with Europe experiencing a staggering 58% decline. In developing countries, capital inflows remained largely stable overall but showed regional variations.
The "reciprocal tariff" measures implemented by the United States this year have escalated global trade tensions, coupled with uncertainties in trade negotiations and economic policies, severely impacting the international investment landscape. Furthermore, a range of other U.S. policies, such as the "America First Investment Policy" memorandum, have exacerbated the effects of global trade tensions on foreign direct investment.
The report warns that if tensions persist, the international investment landscape may face long-term fragmentation risks.
The report calls for increased investment in long-term, inclusive, and sustainability-aligned capital, particularly in the digital economy, to help narrow global disparities.