Eurozone Growth Slows to 0.9% in 2024 as FDI Projects Decline
Eurozone's economic growth has slowed to 0.9% in 2024, hindered by structural issues like low productivity, rising energy costs, and bond yields. Meanwhile, Spain and Poland are poised to gain from ESG projects and manufacturing investments respectively. However, foreign direct investment (FDI) projects in Europe have been declining since 2022, reaching 5,663 in the same year and continuing to decrease.
Despite the drop in FDI projects, capital expenditure (capex) in Europe increased during the same period. The UK remains the top FDI destination, with London acting as a global hub between European and US markets, and a gateway to Africa and the Middle East. According to GlobalData's FDI Trends in Europe (2025), the decline in FDI projects is attributed to 'war and weak macro conditions'.
In 2023, the top three FDI destinations in Europe were the United States, Germany, and France. However, political fragmentation in France may negatively impact its inward FDI intake, despite being one of Europe's top three FDI destinations. Conversely, Germany's industrial strategy and fiscal stimulus are bolstering investor confidence, despite mixed FDI performance in recent years. Notably, the number of opened FDI projects in Europe decreased by an estimated 40% in the first half of 2025 compared to the same period in 2024.
The slowdown in Eurozone GDP growth, coupled with the decline in FDI projects, presents challenges for European economies. However, targeted investments in Spain and Poland, along with strategic initiatives in Germany, offer potential opportunities for growth and recovery.
