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The latest UNCTAD annual report portrays an international investment scenario marked by instability and widespread caution. Global foreign direct investment (FDI) flows show no clear direction, fluctuating in an environment where investor confidence is undermined by unpredictable trade policies, increasing regulatory fragmentation and geopolitical tension that make long-term planning increasingly difficult.
Global investment remains volatile
The distribution of global investment reflects this uncertainty. Advanced and developing economies are moving in divergent directions—not because of strong expansion dynamics but because of different levels of vulnerability and exposure to global risks.
Without a stable framework, investment inflows remain volatile, leaving international investors increasingly exposed to sudden changes in international relations and government priorities. This uncertainty makes long-term capital allocation more difficult and reinforces a cautious approach to new investments.
Investment shifts toward strategic sectors
Adding to the complexity is the growing concentration of investment in a limited number of sectors that are considered essential to global strategic competition.
Semiconductors, artificial intelligence technology, clean energy and critical minerals now absorb nearly half of all new greenfield projects announced in 2025.
This polarisation does not necessarily signal stronger investment momentum. Rather, it reveals a race for technological security and control over strategic resources, reflecting a global environment driven more by protection and resilience than by expansion.
Geopolitical tension shapes investment decisions
For international investors, the increasingly fragmented geopolitical environment is becoming a central factor in investment decisions. Trade uncertainty, regulatory fragmentation and geopolitical tension are making it harder to assess long-term risks and opportunities across markets.
The concentration of capital in strategic industries also highlights the growing connection between investment, national security and economic policy. Sectors such as semiconductors, AI, clean energy and critical minerals are increasingly viewed not only as areas of economic growth but also as strategic assets.
A global economy “nervously waiting”
Overall, the report does not depict a phase of strong investment momentum but rather one of “nervous waiting.” Investors are proceeding cautiously, fully aware of the fragile global balance and the increasingly unstable geopolitical environment shaping every decision.
For global capital markets, the key issue is therefore not simply the volume of investment but where capital is flowing, why it is flowing there and how geopolitical risk is reshaping investment strategies.
