Europe's FDI Projects Plummet in H1 2025 Amid Global Uncertainties
Europe has witnessed a decline in foreign direct investment (FDI) projects in the first half of 2025, with a significant drop in the number of new projects opened. This downturn is attributed to global economic uncertainties and specific challenges within the Eurozone.
According to GlobalData's FDI Trends in Europe (2025) report, the decline in FDI projects is primarily due to 'war and weak macro conditions'. Despite an increase in capital expenditure (capex), the number of opened FDI projects decreased by an estimated 40% in the first half of 2025 compared to the same period in 2024.
Eurozone GDP growth has also been sluggish, stunting at 0.9% in 2024. Structural issues such as low productivity, increasing bond yields, and energy costs have weighed on industrial competitiveness. This follows a post-pandemic rebound in 2022, after which growth in Europe's FDI projects has been declining.
Despite the overall decline, some countries are bucking the trend. Poland, Hungary, and the Czech Republic lead in FDI projects, driven by strong economic growth and favorable investment conditions in Eastern Europe. Spain and Poland are expected to benefit from ESG and manufacturing projects, respectively. Meanwhile, the UK remains the top FDI destination, and Germany's industrial strategy is bolstering investor confidence. However, political fragmentation in France may negatively impact its inward FDI intake.
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