Global foreign direct investment returned to growth in 2025 after two years of decline, reaching $1.6 trillion, but the recovery has been marked by sharp disparities between countries, sectors and projects, according to the World Investment Report 2026 by UN Trade and Development (UNCTAD).
The 6% rise in global foreign direct investment (FDI) signals a return of capital flows across borders, but the rebound has not produced equal gains for economies seeking investment to support growth, employment and technological development. While developed economies recorded a stronger recovery, many developing countries saw only modest increases, with investment increasingly concentrated in a limited number of strategic industries.
According to the report, inflows to developed economies climbed 11% in 2025, while developing economies experienced only 2% growth, reaching $901 billion. The figures highlight a widening challenge for countries that rely on foreign investment not only as a source of financing but also as a pathway to build productive capacity, expand skills, create jobs and gain access to new technologies.
The global investment landscape is becoming increasingly concentrated. The world’s top 20 host economies attracted more than 80% of total FDI in 2025, reinforcing a pattern in which large investment flows are being directed toward established markets and selected sectors. UNCTAD cautioned that overall FDI figures alone do not necessarily reflect the creation of new factories, infrastructure, employment opportunities or technology transfer.
Developing economies continued to receive more than half of global FDI, but growth varied significantly across regions. Developing Asia remained the largest recipient, attracting $644 billion in 2025. Latin America and the Caribbean recorded a 14% increase, reaching $188 billion, while Africa received about $70 billion, a decline from the exceptional level reached in 2024 but still one-third above its average between 2010 and 2024.
For the world’s least developed countries, FDI inflows rose 21% to $43 billion. However, these economies accounted for only 2.7% of global investment, with flows concentrated in a small number of mostly resource-rich countries.
The changing direction of investment has been particularly visible in sectors linked to technology, energy and industrial strategies. Strategic industries, including artificial intelligence infrastructure, semiconductors, critical minerals and energy-transition technologies and services, accounted for 44% of global greenfield project values in 2025, compared with 16% in 2020.
The increase in project values was driven largely by data centres, followed by oil and gas and semiconductor investments. At the same time, many other sectors recorded declines, including renewable energy, infrastructure and manufacturing, reflecting a recovery that remains focused on a narrow group of industries.
Investment in strategic sectors has also been unevenly distributed. Between 2020 and 2025, low-income and lower-middle-income economies attracted only about 10% of strategic-sector investment, compared with more than 20% of investment in other sectors. The gap reflects the growing importance of capital-intensive and technology-intensive projects, which often require advanced infrastructure, specialised skills and strong policy support.
Governments are increasingly influencing where investment flows. In 2025, countries introduced a record 229 investment policy measures. Although most measures remained favourable to investors, many were aimed at directing investment toward strategic industries, strengthening domestic economic priorities or addressing economic security concerns.
The report notes that this more selective investment environment creates both opportunities and challenges for developing countries. As competition for major projects increases, countries with limited infrastructure, smaller markets or fewer skilled workers may face greater difficulty attracting investment that generates wider economic benefits.
UNCTAD emphasised that investment promotion alone will not be enough for developing economies to compete. Countries will need stronger investment facilitation, reliable infrastructure, workforce development, supplier networks and access to regional markets to create conditions where foreign investment can contribute to long-term economic transformation.
International cooperation will also remain important as governments and investors navigate a more fragmented global economy. The report identifies the need for investment partnerships that support both investor resilience and development priorities in host countries.
The outlook for 2026 remains uncertain. Trade policy uncertainty, geopolitical tensions, conflicts, high financing costs and economic fragmentation continue to influence investment decisions worldwide. At the same time, competition for projects in strategic industries is expected to intensify as governments seek to secure future sources of growth and technological capacity.
The findings will shape discussions at UNCTAD’s World Investment Forum 2026, scheduled to take place in Doha, Qatar, from 25 to 27 October. Governments, investors and development partners are expected to examine how investment flows can be directed toward broader economic gains.
As global FDI returns to expansion, the central issue highlighted by the report extends beyond the volume of money crossing borders. The focus is increasingly on where investment is directed, what it builds and how effectively it contributes to development outcomes across economies.
