Despite ongoing geopolitical and macroeconomic uncertainties clouding the foreign direct investment (FDI) outlook for 2024, there are nuanced factors that offer a more optimistic perspective, especially for developing economies.
Anticipated reductions in interest rates in the US and Europe, driven by receding inflation, present an opportunity for multinational enterprises to redirect resources from sluggish domestic markets, given the IMF's projection of a modest 1.4% growth in advanced economies. This shift may enable businesses to pursue opportunities in faster-growing developing economies. Additionally, with the combination of more available capital and a thriving commodity cycle, resource-rich regions are poised to take center stage. Despite China's economic slowdown affecting the outlook for developing Asia, with expected growth slowing from 5.2% in 2023 to 4.8% in 2024, there remains a potential silver lining in these complex economic dynamics.