According to Kearney’s 2023 Foreign Direct Investment Confidence Index (FDICI) Emerging Markets ranking, the UAE is the leading emerging market in the Middle East and North Africa region due to its strong growth, favourable business environment, and focus on innovation and technology. The country ranked first regionally and third globally after China and India. In 2022, the UAE’s GDP grew by 7.9%, while other countries experienced weak growth after a post-Covid boom in 2021. The country is expected to continue growing at a steady pace in 2023 and 2024, with growth rates of 3.2% and 4.8%, respectively.
The launch of the Dubai Economic Agenda (D33) – an $8.7 trillion economic plan to boost trade, and investment, and promote the UAE’s status as a global hub – has made the country an exceptionally attractive destination for investors. The report highlights the government’s commitment to diversifying the UAE’s economy and strengthening its business environment. The UAE ranked 18th globally, followed by Qatar (21st) and Saudi Arabia (24th), boosting the Middle East’s presence on the index.
Saudi Arabia’s strong performance was due to high GDP growth, sweeping pro-business reforms, a strong fiscal outlook, and accelerating progress in economic diversification. Qatar rose three spots in the global ranking from 2022, thanks to the country’s hosting of the Fifa World Cup, the National Vision 2030 aimed at developing and diversifying the economy, and the growing confidence of investors. The GCC countries also ranked high in the emerging markets ranking, with Qatar ranking fourth and Saudi Arabia ranking sixth globally.
The report reflects cautious investor optimism about the global economy, with more than three-quarters of respondents planning to increase their FDI in the next three years. The United States takes the top ranking for the 11th consecutive year, followed by Canada, Japan, Germany, the United Kingdom, and France. Overall, developed markets accounted for 19 out of 25 countries on the index.
Investors cited rising commodity prices, geopolitical tensions, and political instability in emerging markets as among the top risk factors over the next three years. While investors believe in the benefits of globalization and expect it to strengthen, they also anticipate more regionalization over the next three years and that national governments will pursue strategies to increase self-sufficiency.
About Author
