The report released by the UN Conference on Trade and Development highlights that uncertainty is affecting global investment & it may impact on developing countries to achieve the 2030 Agenda for SDGs.
Key Highlights
- FDI Declined: Global FDI flows fell by 11% in 2024, to $1.5 trillion. Inflows declined in most developing economies in the top 20 recipients.
- The US remained the largest recipient of FDI while India ranked 16th.
- Uneven FDI Growth: E.g., Africa saw FDI rise 75%, driven by a single large project in Egypt while Latin America and the Caribbean experienced a 12% decline in total flows.
- Stagnant Investment in Job-Creating Industries:In too many economies, capital is stagnating/bypassing entirely sectors that matter the most – infrastructure, energy, & industries that drive job creation.
- Decline in Sectors Critical for SDGs: The drop was especially steep in sectors critical to achieving the SDGs: renewable energy (-31%), & water and sanitation (-30%).
- Achieving the SDGs in developing countries requires an estimated $4 trillion to $5 trillion annually.
- Reason: Geopolitical tensions, trade fragmentation and intensifying industrial policy competition combined with elevated financial risk & uncertainty, eroding long-term investor confidence.
- Recommendations: Scale up the catalytic role of multilateral development banks; Expanding the use of guarantees, Hybrid capital and de-risking instruments to crowd in private investment.