Eurozone Growth Slows as FDI Projects Drop in Europe
Eurozone's economic growth slowed to 0.9% in 2024 due to persistent structural issues. Meanwhile, the number of foreign direct investment (FDI) projects in Europe dropped by an estimated 40% in the first half of 2025 compared to the same period last year.
Despite the decrease in FDI projects, capital expenditure (capex) in Europe increased during the same period. The UK remained the top FDI destination, with London acting as a bridge between European and US markets. Spain, Portugal, and Germany were the top three countries receiving FDI, with Germany attracting nearly 68 billion euros. Spain and Poland are expected to benefit from environmental, social, and governance projects and manufacturing investments, respectively. However, political fragmentation in France may negatively impact its inward FDI. After a post-pandemic rebound in 2022, FDI projects in Europe have been declining, reaching 3,398 in H1 2025 from a peak of 5,663 in 2022. Germany's industrial strategy and fiscal stimulus are boosting investor confidence despite mixed FDI trends in recent years. GlobalData's FDI Trends in Europe (2025) report attributes the decline in FDI projects to 'war and weak macro conditions'.
While Eurozone growth slowed in 2024, Europe's FDI landscape saw a significant decrease in projects in the first half of 2025. Despite this, capex increased, and certain countries like Spain, Portugal, and Germany attracted substantial investments. However, political instability and global factors continue to impact Europe's FDI trajectory.
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