OECD: Global FDI rebounds in 2025 but underlying growth remains uneven
Global foreign direct investment (FDI) flows rose sharply in 2025, reaching $1.66 trillion — a 15% increase on the previous year — according to the latest OECD data. However, the headline figure masks a more modest recovery once volatility in European financial centres is excluded, with underlying growth closer to 6%.
The rebound reflects a complex and uneven investment landscape. While stronger-than-expected global growth supported activity, persistent geopolitical tensions, inflationary pressures and policy uncertainty continued to shape investor behaviour.
The United States retained its position as the world’s largest FDI destination in 2025, attracting $288 billion, followed by China and Brazil. On the outbound side, the US, Japan and China remained the leading global investors.
A key trend highlighted in the data is the growing importance of intra-company financing and reinvested earnings as drivers of FDI flows. In many markets, these components accounted for the bulk of increases, suggesting that multinational enterprises are prioritising consolidation and optimisation of existing operations over large-scale new investments.
This is further reflected in diverging investment modes. Cross-border mergers and acquisitions (M&A) remained resilient, with deal values rising by 8% and particularly strong growth in emerging markets. By contrast, greenfield investment stalled, with both project numbers and capital expenditure declining —especially in developing economies, where manufacturing investment dropped sharply.
At the same time, FDI activity is becoming increasingly concentrated. A small number of economies continue to capture a disproportionate share of both capital flows and major projects, reinforcing competitive pressures among locations.
Looking ahead, the outlook for 2026 remains uncertain. Ongoing geopolitical instability, particularly in the Middle East, combined with elevated inflation and energy prices, could weigh on investment sentiment.
Overall, the data suggests that while global FDI has regained momentum, the recovery is fragile and uneven, highlighting a shift towards more cautious, internally driven investment strategies rather than broad-based expansion.
