In 2024, inflows of foreign direct investment (FDI) in ASEAN increased by 8 per cent to $226 billion, despite an 11 per cent decline in global flows (figure 1). Since 2021, FDI in the region has been exceptionally strong, with annual inflows exceeding $200 billion, compared with an annual average during the last decade of less than $130 billion.

Most FDI is associated with new investment projects. More than two thirds of inflows in ASEAN consist of equity, rather than intrafirm loans or reinvested earnings by foreign affiliates. The limited importance of cross-border mergers and acquisitions is further evidence; they accounted for only $11 billion in 2024, down 61 per cent.