Global FDI in 2015 jumped 38% from 2014, to $1760bn, according to the new annual world investment report from UNCTAD, the trade and development subsidiary of the United Nations.

The report celebrated the fact that FDI had reached its highest level since the 2008 recession, but warned that investments have lacked productive impact.

Most of the increase was the result of cross-border mergers and acquisitions, many of them in developed countries.  “Overall recovery of FDI flows is very difficult and the road to recovery remains bumpy. There is a lack of productive investment,” said James Zhan, chief writer of the report.

Overall, cross-border mergers and acquisitions hit $721bn in 2015 from $432bn in 2014, making it the largest contributor to the global FDI rebound. Greenfield investments sat at $766bn, although the number of announced greenfield projects actually fell 5% from 2014.

Asia wins

The report highlights Asia as the continent with the greatest capital investment, at $541bn, up from $468bn in 2014. This is a record amount for the continent as well as a 16% increase year-on-year. Mr Zhan cited Myanmar, Cambodia and Laos as countries which saw and should continue to see increases in their FDI flows.

However, total capital investment decreased in Latin America and Africa as well as in transition economies.

In a statement accompanying the report, Secretary-General of the United Nations Ban Ki-moon said: “This growth did not translate into an equivalent expansion in productive capacity in all countries. This is a troubling development in light of the investment needs associated with the newly adopted Sustainable Development Goals and the ambitious action envisaged in the landmark Paris Agreement on climate change.”

Mr Zhan echoed these sentiments: “Overall we think FDI will decline, specifically in greenfield investment.” The report’s preliminary data for 2016 show the number of greenfield investment projects falling by 19% and their value decreasing by 18% compared with the same time period last year.