Published On 7/7/2026
Global foreign direct investment flows rose by 6% during 2025 to reach $1.62 trillion, but the recovery remained limited and unbalanced, with investments concentrated in a few strategic economies and sectors.
According to the World Investment Report 2026 issued by the United Nations Conference on Trade and Development (UNCTAD), advanced economies accounted for the bulk of investment growth, as flows to them increased by 11% to $723 billion, compared to a marginal increase of only 2% in developing economies to $901 billion. The top 20 investment-receiving countries also accounted for more than 80% of total global flows.
Read also
list of 3 itemsend of list
At the Middle East level, the UAE maintained its position among the top ten global destinations for foreign direct investment, after inflows to it increased from $46 billion in 2024 to $48 billion in 2025. It also came among the top ten countries exporting foreign investment with a total of $63 billion, which reflects its continued role as a regional and global center for investment.
On the other hand, the report explained that many developing economies, including countries in the Middle East and North Africa, face increasing competition in attracting investments, with investor interest shifting towards economies that possess advanced infrastructure, skilled labor, strong supply chains, and large markets.
Strategic sectors
The report pointed out that global investments have become increasingly concentrated in five strategic sectors: artificial intelligence infrastructure, semiconductors, energy transformation technologies, critical minerals, and advanced technologies.
The value of new investments announced in these sectors increased from $109 billion in 2020 to $576 billion in 2025, bringing their share of total new investments from 16% to 44% during the same period. Artificial intelligence infrastructure investments were the largest, at $341 billion during 2025, while the semiconductor sector recorded the fastest growth rate.
On the other hand, investments in traditional industries outside these sectors declined by 17% compared to the period 2015-2019, while the percentage of decline reached 20% in developing economies and 65% in the least developed countries, which reduces the chances of developing countries to join global production chains through traditional industries.
Government support gap
The report explained that governments have become more selective in investment attraction policies, with incentives directed towards clean energy, digital infrastructure, advanced manufacturing, and strategic minerals, in addition to expanding foreign investment screening procedures.
He pointed out that the United States, the European Union, and China accounted for about half of industrial support policies over the past decade, while the value of industrial subsidies in advanced economies amounted to about $174 billion, compared to only $19 billion in developing economies, which widens the competitiveness gap in attracting strategic projects.
