GENEVA: Worldwide foreign direct investment fell for a second consecutive year in 2023 amid a global economic slowdown, coupled with swelling trade and geopolitical tensions, the United Nations said Thursday.

Foreign direct investment (FDI) fell by two percent to $1.3 trillion last year, according to a fresh report from the UN Trade and Development agency.

But excluding a few exceptions, the report showed a far sharper decline of more than 10 percent in FDI for the second consecutive year, it cautioned.

UNCTAD said the prospects for FDI remained “challenging” in 2024, but highlighted some positive developments.

It cited the easing of financial conditions and concerted efforts towards investment facilitation, “a prominent feature of national policies and international agreements”.

“We think that 2024 will be better,” UNCTAD chief Rebeca Grynspan told reporters in Geneva.

“There are signs that there will be a modest growth 2024,” she said. “It’s a modest growth, but it’s a change of tendency, and so we are more optimistic towards 2024.”

Falling direct investment hurts developing countries in particular, because it tends to be their largest external source of financing.