Europe sees surge in foreign investment driven by statistical factors
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Europe boosted by “statistical” foreign investments

Foreign direct investment (FDI) inflows into the European economy in 2025 rose by 56% to $239 billion, according to data from the UN Conference on Trade and Development (UNCTAD). However, this surge is caused by specific factors and hides a decline in the real investment sector. Major cross-border mergers and acquisitions (M&As) accounted for most of the growth. Much of the capital came from corporate restructuring and transit financial flows.
Irina Covalenco Reading time: 1 minute
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Such a noticeable statistical growth occurred against the background of the low base effect of previous years, rather than with a uniform growth in the number of new production projects. Ernst & Young notes that it is becoming more difficult to attract foreign capital to Europe due to geopolitical tensions and weak economic growth. At the same time, investors’ long-term expectations remain rather positive: the EU remains attractive due to its large-scale market, developed infrastructure and predictable rules of the game.

Structural changes in the economy

At the same time, the EY report shows a 7% decline in the number of new investment projects in Europe in 2025. This discrepancy can be explained by the difference in methodology between greenfield projects and jobs.

The real business sector is cautious due to geopolitical tensions (41% of investors surveyed) and weak EU growth (35%). At the same time, capital is actively flowing into strategic areas:

Artificial Intelligence: The number of projects increased by 96%.

Defense sector: Investment initiatives grew by 84%.

Green Energy: Growth of 25% to reduce import dependence.


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