In 2024, global FDI saw an even deeper drop, down 11% to around $1.5 trillion. This unexpected downturn has sparked concerns among economists and policymakers about what the new world of capital flows might look like. Starkly contrasting trends are coming out of the east and west. The Association of Southeast Asian Nations (ASEAN) bloc is a bright spot as it continues to lure more investment to advanced manufacturing and green technology industries. The bloc is preparing to usher in Timor-Leste as its 11th member by 2025. Indeed, experts have already begun to game out how this will change foreign direct investment dynamics in Southeast Asia.
One can feel the dramatic change taking place across the Middle East. A strong new divide is developing between the GCC core and other reforming markets including Egypt and Jordan. The GCC is anticipated to set the pace for global FDI in sectors like artificial intelligence (AI), green energy, and logistics. Asia’s rapidly expanding digital economy is projected to reach $1 trillion by 2030. This amazing expansion is supported by a population that is the world’s youngest, with an average age of around 19 and 60% under 35 years of age.
Global economic conditions are shifting, and Latin America is right there. In 2024, the region witnessed moderate growth in foreign direct investment (FDI) inflows, which amounted to $189 billion—a 7.1% rise compared to last year. Perhaps not coincidentally, multinational project announcements in the region hit an all-time record of $168 billion. Floor predictions for FDI approvals into East Africa in Q3 2025 are set at approximately $4.9 billion. This figure illustrates the contrasting trends seen in different parts of the country.
ASEAN’s Attractiveness for Investment
The ASEAN bloc has emerged as a beacon for foreign investors, particularly in advanced manufacturing sectors such as semiconductors and green energy projects. The region’s strategic location and quickly growing consumer base between Eastern Europe, Russia and China have fostered a welcoming environment for investment.
With Timor-Leste set to join ASEAN in 2025, the bloc will expand to 11 members, further enhancing its regional influence. This expansion, experts say, will help lure more capital and strengthen collective impact in advanced manufacturing and technology industries.
“The investable story is shifting from one-off giga announcements and oil-linked macro bets to long-term operating platforms,” said an analyst from designer491/iStock/Getty Images. This shift demonstrates an increasing priority among investors for more sustainable long-term investments that produce steady returns rather than speculative projects.
The ASEAN region is busy diversifying its investment portfolio. This change particularly benefits projects aimed at building out data center havens and large-scale green energy boondoggles. The focus on sustainability aligns well with global trends toward greener technologies, strengthening ASEAN’s position in the global investment landscape.
Middle East’s Evolving Investment Landscape
While a separate GCC core may be somewhat new in the Middle East, the GCC’s investment dynamics are shifting. The GCC countries are poised to lead global FDI in AI infrastructure and green logistics as they navigate their economic diversification strategies.
The GCC’s commitment to sustainable development is clear through its investments in renewable energy projects and supporting technological advancements. These advancements are poised to only strengthen the region’s appeal to foreign investors looking for opportunities within advanced industries.
Markets-oriented reformers like Egypt and Jordan are making big strides. That’s because these countries are all implementing deep structural reforms to improve their investment climates and attract foreign capital. As these markets develop in the coming years, they could offer valuable alternatives for investors looking beyond the GCC core.
HSBC expects that FDI flows between Asia and the Middle East will reach over $270 billion in the next 10 years. This widening corridor is a testament to joint ambitions in technology transfer and market access, linking these two expansive regions even more closely.
Latin America’s Growth amidst Challenges
Latin America has defied expectations and weathered the storm of a rollercoaster global economic recovery. With FDI inflows of $189 billion in 2024, the region saw the largest year-on-year increase in FDI inflows. Much of this growth can be credited to a positive investment policy environment and a growing appetite from multinational corporations.
Meantime, multinationals announced new projects totaling a record high $168 billion. That’s a significant 40% jump over 2023 levels. This trend signals Latin America’s attractiveness as an emerging market for investment opportunities even amid challenges across the globe.
On the flip side, East Africa has struggled to capture FDI. In the third quarter of 2025, approvals shot up to almost $4.9 billion. Yet, project announcements nosedived to $31.37 billion in 1H2025, a huge 53% drop from last year this time. Analysts insist that continued, vigorous recovery efforts are needed to fully recapture investors’ lost confidence in the region.
“From our day-to-day work supporting investors, we expect a significant decline in FDI project volumes in Europe in 2025 compared with 2024,” said Andrew Keable.
This statement speaks to the larger issue of political uncertainty and macroeconomic pressures clouding the investment decision-making process across the country’s regions.