FDI to Developing Economies Hits Lowest Level Since 2005, Says World Bank

June 17, 2025

Foreign direct investment (FDI) into developing economies has fallen to its lowest level since 2005, according to new World Bank research. In 2023, developing countries received just $435 billion in FDI, a sharp drop that reflects rising barriers to trade and investment. These restrictions threaten progress toward global development goals, especially as public debt rises and foreign aid declines.

FDI now accounts for about half of external financing for developing economies and is one of the most effective forms of private investment. Yet, in 2025, half of all FDI-related policy measures in these countries have been restrictive, the highest share since 2010.

World Bank economists emphasize that this decline is largely driven by policy choices. Reversing the trend will require domestic reforms to improve business climates, encourage trade, and strengthen institutions. The upcoming Conference on Financing for Development in Seville will address these issues.

Investment treaties and trade openness significantly boost FDI inflows, but new agreements have slowed in recent years. From 2010 to 2024, only 380 new investment treaties were enacted, far fewer than in earlier decades. Trade agreements also declined, reducing their potential to attract capital.

FDI remains heavily concentrated, with the top 10 developing countries receiving two-thirds of all inflows. China alone attracted nearly one-third, while the poorest 26 countries received only 2 percent. Most of the funding originates from advanced economies, particularly the EU and the United States.

The World Bank recommends three key actions:

  1. Attract more FDI by removing restrictive policies and improving the investment climate.
  2. Maximize FDI benefits through institutional reform, human capital development, and formal sector participation.
  3. Strengthen global cooperation to direct investment toward countries with the greatest need.

The World Bank continues to support these efforts by helping lower investment risks, improving market conditions, and increasing private sector engagement.

Source: (Caribbean News Global)

Disclaimer:

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer(s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.

More Stories from the Market
shutterstock_148562033
January 13, 2026   Honey Bun (1982) Limited (HONBUN) has advised that a senior manager purchased 7,079 HONBUN shares on January 8, 2026. …
shutterstock_453968572
January 13, 2026   Radio Jamaica Limited (RJR) has advised that following an agreed review of board membership within the Group, the follow…
shutterstock_537598660
January 13, 2026 Weekly Pick 01.13.2026 SVL   Disclaimer: Analyst Certification -The views expressed in this research report accu…
shutterstock_453968572
January 13, 2026 United States:   US Core CPI Rose by Less Than Forecast in December   Underlying US inflation rose in December by less th…
shutterstock_148562033
January 12, 2026   JFP Limited (JFP) has advised that the following transactions occurred on January 7, 2026: a connected party sold 1…
shutterstock_148562033
January 12, 2026   Honey Bun (1982) Limited (HONBUN) has advised that a senior manager purchased 2,921 HONBUN shares on December 31, 2025. …
shutterstock_148562033
January 12, 2026   Paramount Trading Jamaica Limited (PTL) has advised of the purchase of 50,000 PTL shares by a senior manager on December…
shutterstock_453968572
January 12, 2026 United States:   Goldman Sees Strong US Growth, Tame Inflation With Two Fed Cuts   The US economy this year will get…