Global investment rebounds to US$1.6tn but productive finance remains concentrated

Global foreign direct investment rose by 6% to US$1.6tn in 2025, ending two consecutive years of decline, according to UN Trade and Development’s World Investment Report 2026.

The recovery was concentrated in a relatively small number of countries, sectors and large projects. Developed economies recorded an 11% increase in investment inflows, while developing economies saw growth of only 2% to US$901bn.

The world’s 20 largest investment destinations attracted more than 80% of total foreign direct investment.

A significant proportion of the increase came from major projects in artificial intelligence infrastructure, data centres, semiconductors, critical minerals and energy-related industries.

Strategic sectors accounted for 44% of the value of global greenfield investment projects in 2025, compared with 16% in 2020.

UNCTAD said the figures show that higher investment volumes do not automatically translate into new productive capacity, jobs, infrastructure or stronger domestic supply chains.

Many developing economies continue to receive limited investment in manufacturing, logistics, renewable energy and other sectors that can support wider trade and economic development.

The outlook for 2026 also remains uncertain due to geopolitical tensions, trade policy changes, high financing costs and fragmentation of global production networks.

For banks and development finance institutions, the findings point to an uneven pipeline of projects requiring long-term finance, guarantees, working capital and trade support.

Large investments in digital and strategic infrastructure can generate significant demand across supplier networks. But the concentration of capital in a small number of markets may leave companies in lower-income economies with fewer opportunities to participate in international value chains.

The report shows that the central issue is no longer simply the total amount of investment moving across borders. It is whether that capital reaches projects capable of supporting production, suppliers and sustainable trade growth.