Kearney’s 2025 FDI Confidence Index® highlights APAC’s innovation-driven growth amid mounting global headwinds
Thailand Ranks Among Top 10 in Kearney 2025 Emerging Markets Foreign Direct Investment Confidence Index
- Eight APAC markets secured spots in the top 25 in Kearney 2025 Foreign Direct Investment Confidence Index
- Rising commodity prices, regulatory challenges, and geopolitical tensions temper optimism
- New U.S. tariffs add urgency to scenario planning and highlight sector vulnerabilities, particularly in manufacturing and automotive
April 10, 2025, Thailand — Kearney’s Global Business Policy Council released its 2025 Foreign Direct Investment (FDI) Confidence Index, a survey capturing investor sentiment on FDI flows over the next three years, including perspective towards Thailand.
Now in its 27th year, the 2025 Index captures a distinct snapshot of investor sentiments at a moment of major global inflection. Though there have been profound developments since the survey was conducted in January, key findings remain illuminating, particularly the value that investors place on efficiency of legal and regulatory processes, domestic economic performance, and technological and innovation capabilities.
Eight markets from APAC make the top 25 this year, the same representation as last year. This includes Japan (4th), China (including Hong Kong) (6th), Australia (10th), South Korea (14th), Singapore (15th), New Zealand (16th), Taiwan (23rd) and India (24th).
Investors highly value the technological and economic performance of some APAC markets, while the challenges from a complex global geopolitical environment have negatively impacted investors’ views on others.
Thailand Ranks 10th in the FDICI’s Emerging Market Index
FDICI’s Emerging Market Index was launched in 2023 to highlight attractive emerging markets for FDI over the next three years. Thailand secured the 10th spot with investors citing the talent and skills of the workforce as the most compelling reason for investing in Thailand (34 percent). The country’s ease of doing business (24 percent) and natural resources (24 percent) were tied as the second most compelling reasons to invest.
Chanchai Tanatkatrakul, Partner and Thailand Country Head, Kearney said, “Thailand has been proactive in facilitating investment and removing obstacles for foreign investors. However, given the intense competition for FDI from various markets, it is crucial that the country continues to innovate and strengthen its competitiveness by prioritizing the development of skilled talent and implementing tailored incentives in target sectors.”
“The new U.S. tariffs will undoubtedly impact Thailand”, he continued, “as the United States has been the largest export market. Sectors such as Electronics & Electrical Appliances, Industrial Machinery & Equipment and Automotive are expected to be hard-hit, on top of existing cost and regulatory challenges.”
“Despite these issues, Thailand retains its core appeal, offering strong fundamentals that investors value – talent, ease of doing business, and natural resources. With proactive policies and strategic investment incentives, Thailand can unlock long-term value amidst a volatile global environment”, Chanchai concluded.
Technology and Economic Strength Propel APAC Markets
Investor confidence in APAC remains underpinned by notable advancements in technology and solid economic fundamentals. Japan’s ascent from 7th to 4th place is a prime example, as market participants point to its leading technology innovation and strong economic performance, bolstered by a tight labor market and record wage growth.
Likewise, South Korea makes its strongest-ever showing by leaping from 20th to 14th. 41 percent of investors cite its dynamic technology sector as a key driver of renewed confidence. Significant government investments in semiconductors are potential influencing factors behind this change.
82 percent of APAC-based investors plan to increase FDI in the next three years. 50 percent are more optimistic than a year ago about the APAC economy.
Regional Headwinds Temper Optimism
Investor sentiment is also affected by rising uncertainties.
Roughly 43 percent of APAC investors surveyed see a rise in commodity prices as the most likely development over the next year, up a striking 14 percent from last year. The uptick is perhaps explained by investor fears of increased global conflict and subsequent supply chain disruptions that could drive commodity prices up.
Ranked second as a likely development in 2025 for APAC investors is a more restrictive business regulatory environment in developed markets (36 percent), up two percent from last year. Tied for third are a rise in geopolitical tensions and a more restrictive business regulatory environment in emerging markets (28 percent).
China slipped from 3rd to 6th place, reflecting ongoing economic challenges including a persistent property crisis and heightened US–China trade tensions. Nevertheless, the nation’s tech innovation continues to be a draw, as evidenced by the recent launch of DeepSeek AI.
Furthermore, Singapore’s drop from 12th to 15th and India’s decline from 18th to 24th underscore growing concerns over trade-related risks and regulatory complexity, respectively.
Thailand stands out for net investor optimism among emerging markets
Despite the headwinds, investor optimism in the Asia Pacific remains high. Southeast Asia continues to perform strongly with Thailand, Malaysia, Vietnam and Philippines ranking among the top 15. Thailand continues to stand out among emerging markets, retaining the 5th place in net investor optimism in 2025.
About the 2025 Kearney FDI Confidence Index®
The Kearney FDI Confidence Index® is an annual survey of global business executives that ranks markets that are likely to attract the most investment in the next three years. In contrast to other backward-looking data on FDI flows, the FDICI provides unique forward-looking analysis of the markets that investors intend to target for FDI in the coming years. Since the FDICI’s inception in 1998, the markets ranked on the Index have tracked closely with the top destinations for actual FDI flows in subsequent years.
The 2025 Kearney FDI Confidence Index® is constructed using primary data from a proprietary survey of 536 senior executives of the world’s leading corporations. The survey was conducted in January 2025. Respondents include C-level executives and regional and business leaders. All participating companies have annual revenues of $500 million or more. The companies are headquartered in 30 countries and span all sectors. Service-sector firms account for 53 percent of respondents, industrial firms for 35 percent, and IT firms for 12 percent.
The Index is calculated as a weighted average of the number of high, medium, and low responses to questions on the likelihood of making a direct investment in a select market over the next three years. Together, the markets presented to respondents in the survey received 97 percent of the world’s inward FDI flows in 2023, according to UNCTAD data.
Index values are based on responses only from companies headquartered in foreign markets. For example, the Index value for the United States was calculated without responses from US-headquartered investors. Higher Index values indicate more attractive investment targets.
All economic growth figures presented in the report are the latest estimates and forecasts available from Oxford Economics unless otherwise noted. Other secondary sources include investment promotion agencies, central banks, ministries of finance and trade, relevant news media, and other major data sources.
About Kearney
Since 1926, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact.
To learn more about Kearney, please visit www.kearney.com.
For past editions of the FDI Confidence Index, please go to:
www.kearney.com/foreign-direct-investment-confidence-index.
For more information, contact the Global Business Policy Council (gbpc@kearney.com).
Media contact:
TQPR Thailand on behalf of Kearney