Geneva, Switzerland — Globalization is in retreat, UN Secretary-General Antonio Guterres said Thursday following a further decline in foreign direct investment last year — a fall expected to continue as trade tensions broil.
After two consecutive years of decline, the FDI outlook for 2025 remains negative due to uncertainties triggered by the tariff war waged by US President Donald Trump, the UN Trade and Development agency UNCTAD said.
In its 2025 World Investment Report, UNCTAD said that when adjusted to strip out volatile financial flows through several European economies, FDI fell by 11 percent last year to $1.5 trillion.
“At a time when the world should be deepening cooperation and expanding opportunity, we are seeing the opposite,” Guterres said.
“Barriers are rising. Globalization is retreating. And the consequences for sustainable development are profound.
“Rising trade tensions, policy uncertainty and geopolitical divisions risk making the investment environment even worse,” he added.
Presenting the annual report at a press conference, UNCTAD chief Rebeca Grynspan said it contained a “clear and urgent” message that FDI remains weak — with the outlook negative for this year.
The investment landscape in 2024 was shaped by international tensions, trade fragmentation, and intensifying industrial policy competition, UNCTAD said.
These factors are “eroding long-term investor confidence”, the agency said.
Grynspan said that for the first time since the Covid-19 pandemic, “good signs of recovering trade” could be seen last year, but the current uncertainties “have killed that possibility for 2025”.
“The problem that we have is that we don’t see an end” to the trade war unleashed by Trump in April, he said.
The global decline was largely driven by a 22 percent drop in FDI to developed economies, including a 58 percent plunge in Europe, UNCTAD said.
North America bucked the trend with a 23 percent increase, led by the United States.
In developing countries, inflows appeared broadly stable.
