UN Trade and Development’s (UNCTAD) world investment report 2026 released report that the global foreign direct investment (FDI) grew 6 percent to USD 1.6 trillion in 2025, closing two consecutive years of decline. The recovery is fragile and uneven: inflows to developed economies grew 11 percent, while developing economies registered only 2 percent growth, standing $ 901 billion. The top 20 host economies attracted more than 80 percent of global flows, and strategic sectors (AI infrastructure and AI-related technologies, advanced and sensitive technologies, semiconductors, energy transition technologies and services, and critical minerals) accounted for 44 percent of global green field project values, up from 16 percent in 2020. Africa received $ 70 billion, one third above its 2010 to 2024 average but below an exceptional 2024, while least developed countries received $ 43 billion, only 2.7 percent of global flows. International experts call on governments to accelerate investment agreement reform, preserving the right to regulate while placing sustainable development at the centre of treaties. The statistics confirm that investment is being redirected by industrial strategy and security screening toward a narrow set of economies and sectors, deepening the marginalization of most developing countries. According to data released by the State Bank of Pakistan (SBP), Pakistan recorded a net FDI inflow of $219.5 million in September 2026, up 18.5 percent from $185.3 million in the corresponding month last year. During the month, gross FDI inflows stood at $292.7 million against outflows of $73.2 million, resulting in a net inflow of $219.5 million. On a portfolio basis, foreign portfolio investment (FPI) registered a net outflow of $26.9 million, bringing total foreign private investment to $192.6 million. Foreign public investment, entirely in debt securities, contributed an additional $2,891.2 million, lifting overall foreign investment to $3,083.8 million in September, compared a net outflow of $361.5 million a year earlier. On a cumulative basis, FDI during July–September FY2027 reached at $719.7 million, up 19.9 percent from $600.4 million in the same period of FY2026, showing improving direct investment momentum. Gross inflows during the period grew to $967.7 million from $806.5 million, while outflows reached at $248.0 million versus $206.2 million. Meanwhile, cumulative FPI registered a net outflow of $28.6 million during 1QFY2027, against with an outflow of $121.5 million a year earlier. Total foreign private investment grew to $691.1 million from $478.8 million, while foreign public investment stood $2,960.6 million compared an outflow of $511.8 million. Total foreign investment climbed to $3,651.7 million in 1QFY2027, against with a net outflow of $32.9 million in the corresponding period of FY2026. Experts recorded that FDI in 2026 faces a more uncertain and divided worldwide environment. Geopolitical tensions can make investors delay, relocate, or cancel projects. Regional conflicts increase risks to workers, assets, and supply routes. Trade disputes and changing tariffs make cross-border planning harder. It is said that governments are screening more foreign investments for national security reasons. This can limit investment in technology, energy, and critical infrastructure. High financing costs make large projects more expensive to fund. Economic uncertainty can weaken demand and reduce expected returns. Companies are reshaping supply chains, which can create costly disruption. At the same time, supply-chain shifts may open opportunities in new locations. Investment is concentrated in a relatively small number of countries and industries. Artificial intelligence, semiconductors, and clean energy attract significant capital. Other industries may struggle to secure funding and grow. Developing economies often cannot match the subsidies offered by wealthier nations. Many also face gaps in infrastructure and reliable energy supply. Shortages of skilled workers can limit the success of foreign projects. Limited access to affordable finance can hold back investment. Changing tax rules and incentives make business conditions less predictable. Different regulations across countries add compliance costs for international firms. Currency fluctuations can reduce the value of profits sent home. Political instability and corruption concerns can discourage investors. Climate hazards may threaten projects and affect where companies choose to invest. Environmental standards can add costs but also encourage sustainable investment. Uneven investment flows risk widening the gap between developed and developing economies. Overall, investors must weigh growth opportunities against financial, political, and regulatory risks.
Trends across developing regions diverged.
- Developing Asia remained the largest developing recipient region at $644 billion, but trends shifted within the region. East Asia declined, while South-East Asia became the largest recipient subregion. India’s inflows grew 44 percent to $39 billion.
- Latin America and the Caribbean received about $188 billion, up 14 percent, led by South America – Brazil in particular. .
- Africa received $70 billion. This was down from an exceptional 2024, but still one third above its 2010–2024 average. .
- Least developed countries received $43 billion, up 21 percent. But this represented only 2.7 percent of worldwide FDI flows and remained concentrated in a few economies.