In 2014, global foreign direct investment (FDI) inflows declined by 8% to an estimated US$1.26 trillion, due to fragility of the global economy, policy uncertainty and geopolitical risks. A large divestment in the United States also reduced the global level of FDI flows.

FDI flows to developed countries dropped by 14% to an estimated US$511 billion, significantly affected by a large divestment in the United States. FDI flows to the European Union (EU) reached an estimated US$267 billion; this represents a 13% increase on 2013, but is still only one-third of the 2007 peak.

Flows to transition economies more than halved to US$45 billion as regional conflict, sanctions on the Russian Federation, and negative growth prospects deterred foreign investors (especially from developed countries) from investing in the region.

Developing economies saw their FDI inflows reach a new high of more than US$700 billion, 4% higher than 2013, with a global share of 56%. At the regional level, flows to developing Asia were up, those to Africa remained flat, while FDI to Latin America declined.

In 2014, China, with an increase of 3%, became the world's largest recipient of FDI. The United States fell to the 3rd largest host country with almost a third of their 2013 level. Among the top five FDI recipients in the world, four are developing economies.

Cross-border mergers and acquisitions (M&As) rose by 19%, driven mainly by restructuring deals. Announced greenfield investment projects rose by 3% in 2014.

A solid FDI rise remains distant. A subdued global economic outlook, volatility in currency and commodity markets and elevated geopolitical risks will negatively influence FDI flows. On the other hand, the strengthening of economic growth in the United States, the demand-boosting effects of lower oil prices and proactive monetary policy in the Eurozone, coupled with increased liberalization and promotion measures, will favorably affect FDI flows.