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Global Economic Prospects, June 2025
The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the weak outlook limits their ability to boost job creation and reduce extreme poverty. This challenging context is compounded by subdued foreign direct investment into EMDEs.
Fragile and Conflict-Affected Situations: Intertwined Crises, Multiple Vulnerabilities
Nearly 40 percent of the population of FCS economies lives in extreme poverty. By 2030, these economies are projected to account for nearly 60 percent of the world’s extreme poor, up from 50 percent in 2024. They also bear a growing burden of hunger: around 200 million people—nearly one in five—now face acute food insecurity.
Foreign Direct Investment in Retreat: Policies to Turn the Tide
Foreign direct investment (FDI)—an important source of external financing for emerging market and developing economies (EMDEs)—has weakened since the global financial crisis, heightening the challenges of filling vast infrastructure gaps, reducing poverty, creating new jobs, and addressing climate change. This study provides a broad perspective on the evolution of FDI inflows to EMDEs since 2000, including patterns across regions and changes in sectoral composition.