Global FDI experienced a downturn of 12% in 2022 to $1.3 trillion following a strong rebound the previous year. This decline can be attributed to ongoing global crises such as the war in Ukraine, high food and energy prices, and soaring public debt. Developed economies saw the most significant impact, with FDI falling by 37% to $378 billion. In contrast, developing countries experienced a 4% increase in FDI, with a few large emerging countries attracting most of the investment. However, flows to the least developed countries declined.
Despite the overall decrease in FDI, greenfield investment project announcements grew by 15% in 2022, expanding in various regions and sectors. Industries facing supply chain challenges, such as electronics, semiconductors, automotive, and machinery, experienced a surge in projects. Conversely, investment in the digital economy sector slowed. International investment in renewable energy generation, particularly solar and wind, also continued to grow, albeit at a slower 8% rate compared to the 50% growth in 2021. Notably, projects announced in battery manufacturing tripled to more than $100 billion in 2022.
The report also highlighted a trend of major oil companies gradually selling fossil fuel assets, generally to unlisted private equity firms and smaller operators with lower disclosure requirements. This shift signals the need for new dealmaking models to ensure responsible asset management.