UNCTAD’s Global Investment Trends Monitor suggests global FDI has remained weak in the first six months of 2024. Excluding European conduit economies that hold investment funds before these reach their final destination, global FDI rose by just 1%.  

The value and number of international project finance deals decreased by 30%, keeping aligned with 2023’s downward trend. The value of cross-border mergers and acquisitions also decreased by 5%. High financing costs and inflationary pressures were the main drivers of the weak figures. The marginal 1% increase, at least, halts the downward slide of the past two years and signals a more optimistic outlook on the future of financial conditions.

The trends differed across regions and economies, where some were bolstered by a surge in global semiconductor investment.  

FDI in developed countries 

There was a stark contrast between North America and Europe’s FDI intake. Excluding multinational enterprise transactions and conduit economies, which heavily affect cross-border financial flows, FDI flows in Europe fell by 4%. In France, inflows increased by 8% and in Germany by 16%. However, lower FDI inflows in Italy, Poland and Sweden help explain the overall decline. 

The number of greenfield project announcements in Europe declined by 11% in developed economies. Europe had 800 fewer projects than in the same period in 2023. There were major declines in projects in Germany, the UK, Poland and France.  

The US, Japan and Canada fared better. The value of greenfield projects, driven largely by investments in the US, rose by 20%.

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FDI inflows in North America increased by 9%, mainly driven by higher flows into the US (+7%).  At the same time, EU countries experienced a 25% decrease in the value of greenfield FDI projects.  

The global decline in the number of projects mainly came from a decrease in information and communication technology projects, while an increase in project value was heavily influenced by major developments in the semiconductor industry. The three largest projects in the industry all target the US and are worth a combined $60bn, reflecting the gains of the CHIPS Act, which aimed to strengthen local semiconductor production.  

FDI in developing economies 

Flows to developing economies grew by 5% but were mainly carried by a $35bn international financial project in Ras El-Hekma, Egypt. Without this influx, inflows to developing countries would have grown by only 3%, reflecting declining trends from 2023.  

There was an 11% decline in the number of greenfield project announcements and a 24% decrease in their value. The decline contrasts with the positive growth felt in 2023 when greenfield investment in developing countries looked more promising. The automotive sector experienced a 39% decrease in value and a 16% drop in the number of projects.  

International project finance deals also fell by 25% in H1 2024, affecting major markets such as India, Brazil, Indonesia, China and South Africa. 

Semiconductor industry driving value  

The booming semiconductor industry, where investment has quadrupled in the first six months of the year, has driven growth in supply-chain-heavy sectors such as automotive, electronics and machinery industries. Out of all FDI project announcements, five of the largest six were related to chip factories.