Global Foreign Direct Investment (FDI) rose 37% to $1.082 trillion in the first half of 2026, driven largely by developed economies and major transactions in strategic industries, even as the number of new investment projects continued to decline, according to the United Nations Conference on Trade and Development (UNCTAD).
The increase, reported in UNCTAD’s October 2026 Global Investment Trends Monitor, highlights a recovery increasingly supported by large transactions, mergers and acquisitions, and investments in digital infrastructure rather than a broad expansion of new projects.
Developed economies attracted $596 billion in FDI during the period, a 74% increase compared with the half-year average of 2025. Inflows into developing economies rose by just 8% to $486 billion.
The contrast was also reflected in investment announcements. The number of global greenfield projects declined by 15%, while their combined value fell by 10%. International project finance deals, which are important for large infrastructure developments, dropped by 11%, although their total value remained broadly unchanged.
Cross-border mergers and acquisitions provided another indication of the uneven recovery. Their combined value increased by 57% in the first three quarters of 2026, but the number of transactions fell by 23%, suggesting that the growth was concentrated in a smaller number of high-value deals.
Africa records higher inflows but fewer projects
Africa attracted $42 billion in FDI during the first half of 2026, representing a 19% increase, making it one of the stronger-performing developing regions.
However, the improvement in capital inflows has not been matched by an expansion in new investment activity.
The number of announced greenfield projects across Africa fell by 19%, while international project finance deals declined by 33%. In other developing African economies outside North Africa, greenfield project announcements fell by 25%, and international project finance activity contracted by 44%.
The figures suggest that although more capital entered the continent, the pipeline of new industrial and infrastructure investments remained under pressure.
UNCTAD said greenfield investment activity in developing countries continued to weaken, with project announcements falling by more than 1,000 compared with the corresponding period of 2025. The decline was particularly pronounced in information and communication technology and manufacturing.
The value of announced greenfield projects in developing economies also fell by 9%, partly reflecting a $32 billion reduction in announced data centre investments compared with the same period last year.
AI and semiconductors attract major investment
Investment in artificial intelligence infrastructure and semiconductors continued to shape global investment flows, with major projects concentrated in a handful of economies.
Taiwan Semiconductor Manufacturing Company’s $76.5 billion expansion in the United States was the largest greenfield investment announcement recorded in the first seven months of 2026. Japan’s SoftBank also announced a $49 billion investment in AI-related data centres in France.
Other major projects included Micron Technology’s $24 billion semiconductor investment in Singapore and Meta’s $9.7 billion data centre project in Canada.
Despite these large commitments, the number of greenfield projects in global value chain-intensive manufacturing industries declined by 4%. The number of manufacturing projects in developing economies fell by 10%, reflecting continued uncertainty surrounding trade policies and international supply chains.
Investment in extractive industries moved in the opposite direction, with project values increasing by 44% and the number of projects rising by 11%, supported by higher energy prices.
Renewable energy financing faces further pressure
Infrastructure investment also remained weak, particularly in renewable energy.
International project finance activity in renewable energy declined by a further 13% in the first half of 2026, extending a contraction that has lasted four consecutive years. The decline was more severe in developing economies, where activity fell by 33%, compared with 4% in developed economies.
The number of international project finance deals across developing economies fell by 25%, marking the fourth consecutive year of decline.
UNCTAD attributed the weakness partly to high capital costs and risks associated with economic and geopolitical uncertainty, which continue to affect the financing of large infrastructure projects.
Investment in sectors linked to the Sustainable Development Goals also weakened. The number of related investment project announcements in developing countries fell by about 25% in the first half of 2026, following a decline of approximately 5% in 2025.
Middle East conflict adds to investment uncertainty
The conflict in the Middle East is creating additional pressure on international investment through higher energy prices, transportation costs and insurance premiums.
UNCTAD said disruptions to the Strait of Hormuz have increased logistical costs and inflationary pressures, tightening financial conditions, particularly in developing economies.
Tourism has been among the most exposed industries, with greenfield project announcements in accommodation and food services declining by 28%. Renewable energy project announcements fell by 29%, while transportation and storage investment activity contracted by 22%.
The conflict is also affecting investment flows from Gulf Cooperation Council countries, which have become significant sources of financing for infrastructure and sustainable development projects in developing economies.
In the second quarter of 2026, outward project finance investment from GCC countries fell by more than half compared with the average for the previous five years and the corresponding period of 2025.
By contrast, domestic investment in GCC economies more than tripled year-on-year, driven largely by a nearly $55 billion urban development project announced by Dubai-based Emaar.
UNCTAD expects the global investment environment to remain challenging through the remainder of 2026, citing geopolitical tensions, rising borrowing costs, energy price pressures and multinational companies’ efforts to reduce supply chain risks.
While large investments in digital infrastructure and other strategic industries could sustain headline FDI figures, the concentration of capital in a limited number of high-income economies and investment hubs raises concerns about the availability of financing for developing countries.
