In 2014, headline FDI inflows declined by 8% to an estimated $1260bn, according to figures released by the United Nations Conference on Trade and Development (Unctad).

Fragility of the global economy, policy uncertainty and geopolitical risks, as well as a large divestment in the US, have combined to reduce FDI flows last year. Unctad's figures include not only greenfield investments but also mergers and acquisitions (M&As) and other types of investment; they were released in the latest issue of the Global Investment Trends Monitor, as a preview to findings to be analysed in the forthcoming World Investment Report 2015, which will be published in June 2015.


FDI flows to developed countries dropped by 14% to an estimated $511bn, significantly affected by the divestment in the US. FDI flows to the EU reached an estimated $267bn; this represents a 13% increase on 2013, but is still only one-third of the 2007 figure, when flows were at their peak. Flows to transition economies more than halved to $45bn as regional conflicts, sanctions on the Russian Federation, and negative growth prospects deterred foreign investors (especially from developed countries) from investing in the region.

Developing economies saw their FDI inflows reach a new high of more than $700bn, 4% higher than 2013, with a global share of 56%. At the regional level, flows to developing Asia were up, those to Africa remained flat, while FDI to Latin America declined.

In 2014, China, with an increase of 3%, became the world's largest recipient of FDI. The US fell to the third largest host country, with almost a third of its 2013 level. Among the top five FDI recipients in the world, four are developing economies.

Crossborder M&As rose by 19%, driven mainly by restructuring deals. Announced greenfield investment projects rose by 3% in 2014, according to Unctad.

A solid rise in FDI remains distant, Unctad said in a release about the data: "A subdued global economic outlook, volatility in currency and commodity markets and elevated geopolitical risks will negatively influence FDI flows. On the other hand, the strengthening of economic growth in the US, the demand-boosting effects of lower oil prices and proactive monetary policy in the eurozone, coupled with increased liberalisation and promotion measures, will favourably affect FDI flows."