Trends by industry in FDI in 2023 show that the number of projects increased 16% in global value chain (GVC) intensive sectors.
Especially, this occurred in automotive, textiles, machinery and electronics.
At the same time, the number of greenfield projects announced in semiconductors fell 10% (39% by value) after strong growth in 2022.
The number of greenfield project announcements and international project finance deals in infrastructure industries (including transportation, energy, water and telecommunications) fell 4% overall, driven largely by lower project finance in renewable energy.
In particular, new international project finance deals in the renewable energy sector fell 17% in number and 10% in value, only marginally less than the overall decline in project finance.
The decline in the number of new projects was the first since the Paris Agreement in 2015.
Industry in FDI
Looking ahead, UNCTAD believes that a modest increase in FDI flows in 2024 appears possible, as projections for inflation and borrowing costs in major markets indicate a stabilization of financing conditions for international investment deals.
However, significant risks remain, including geopolitical risks, high levels of accumulated debt in many countries, and concerns about further global economic fracturing.
Industry participation in FDI is a significant phenomenon in the global economy, with companies undertaking these flows for expansion, technological upgrading and modernization, acquisitions and mergers, supply chain development and access to local markets, among other factors.
Greenfield projects
The number of international investment projects announced in developing countries in sectors relevant to the Sustainable Development Goals (SDGs, including infrastructure, renewable energy, water and sanitation, food security, health and education) remained stable.
The number of international project finance deals relevant to the SDGs decreased by 27% (-40% in value).
While the number of SDG-relevant greenfield projects increased 12% (6% by value), the number of projects in food and agriculture increased marginally from low levels in 2022; most other sectors recorded a decline.