May 4, 2023
According to Kearney’s 2023 Foreign Direct Investment Confidence Index Emerging Markets (FDICI) ranking, the United Arab Emirates (UAE) is the leading emerging market in the MENA region. The index aims to provide business leaders with additional insights into which emerging markets are most appealing to investors, with the UAE ranking first regionally and third globally after China and India due to its strong growth last year, attractive business environment, and focus on innovation and technological capabilities. For the first time in the index’s 25-year history, the exclusive ranking was published, and it showed that the UAE’s GDP grew 7.9% in 2022, while many other countries suffered weak growth following a post-Covid boom in 2021. The UAE is anticipated to continue growing at a steady pace in 2023 and 2024, with growth rates of 3.2% and 4.8%, respectively. The Dubai Economic Agenda (D33), an $8.7tn economic plan, is also expected to boost trade, investment, and promote its status as a global hub.
The Middle East’s presence on the index was boosted by the UAE, ranking 18th globally and joined by Qatar (21st) and Saudi Arabia (24th). The kingdom’s strong performance was fuelled by high GDP growth (8.7% in 2022), sweeping pro-business reforms, a strong fiscal outlook, and accelerating progress in economic diversification. Qatar rose three spots in the global ranking from 2022, likely due to Qatar’s prestigious hosting of the FIFA World Cup last year, boosting investors’ interest coupled with the country’s National Vision 2030 aimed at developing and diversifying the economy. The GCC countries also placed high in the emerging markets ranking, with Qatar ranking fourth and Saudi Arabia ranking sixth globally.
Investor sentiment is growing in other Middle East countries, with Egypt, Turkey, and Morocco positioned 14th, 15th, and 16th in the emerging markets ranking, respectively. The report from the global strategy and management consulting firm reflects cautious investor optimism about the global economy, with over three-quarters (82%) planning to increase their FDI in the next three years, and 86% citing FDI as more important for their corporate profitability and competitiveness in the next three years. However, this positive sentiment is tempered by concern about downside risk.
Source: Gulf Business
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