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| World Bank sees decline in investment in developing countries |
| Washington, 17.06.2025 |
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| Foreign direct investment (FDI) into developing economies fell to its lowest level since 2005 in 2023, according to a World Bank report released on Monday, citing rising trade and investment barriers. TASR reports this based on an AFP report.
Foreign direct investment inflows into developing countries in 2023 was just $435 billion (€375.84 billion), the Washington-based bank said, noting that 2023 is the latest year for which data is available.
As a share of gross domestic product (GDP), FDI flows to developing economies were at 2.3% in 2023, about half their peak in 2008.
“What we are seeing is the result of public policy,” said World Bank Chief Economist Indermit Gill, noting that investment is falling while public debt is reaching new highs.
Governments have been building barriers to investment and trade in recent years rather than removing them, he said.
Reversing the slowdown in FDI is “essential for job creation, sustainable growth and achieving broader development goals,” said Ayhan Kose, the World Bank’s deputy chief economist, stressing that FDI can be a powerful driver of economic growth.
But investment contracts, a catalyst for investment flows, have also fallen. Only 380 new investment treaties entered into force between 2010 and 2024. That was less than half the number between 2000 and 2009, when about 870 treaties entered into force, the World Bank report showed.
“Global economic policy uncertainty and geopolitical risk have soared to their highest levels since the turn of the century,” the report continued, noting that FDI has also been concentrated in larger economies.
Two-thirds of FDI flows to developing economies between 2012 and 2023 went to just 10 countries, with China, India and Brazil together accounting for almost half of total FDI to emerging developing economies, while the 26 poorest countries received “barely two percent,” the report added.
The World Bank has called for stronger global cooperation to help channel financing to developing economies with the greatest investment shortfall.
(1 EUR = 1.1574 USD) |
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