UAE is the leading emerging market across the MENA region, according to Kearney’s 2023 Foreign Direct Investment Confidence Index (FDICI) Emerging Markets ranking.
The ranking is aimed at providing business leaders to determine which markets are most appealing for investors.
The UAE ranked number one regionally and third globally after China and India due to its strong growth last year, followed by its attractive business environment and focus on innovation and technological capabilities, a statement by FDICI said.
AE is the leading emerging market across the MENA region, according to Kearney’s 2023 Foreign Direct Investment Confidence Index (FDICI) Emerging Markets ranking.
The ranking is aimed at providing business leaders to determine which markets are most appealing for investors.
The UAE ranked number one regionally and third globally after China and India due to its strong growth last year, followed by its attractive business environment and focus on innovation and technological capabilities, a statement by FDICI said.
FDICI MENA Rankings
According to the index, the UAE ranked 18th globally, followed by Qatar at the 21st rank and Saudi Arabia at the 24th rank.
Saudi Arabia’s strong performance was driven by an 8.7 percent GDP growth in 2022, sweeping pro-business reforms, a strong fiscal outlook, and accelerating progress in economic diversification, the index said.
Qatar rose by three ranks globally from 2022, driven by being the host country for FIFA World Cup 2022 Qatar.
The World Cup had boosted investor interest, in addition to the country’s National Vision 2030, which aims to diversify Qatar’s economy away from oil.
“The robust growth of Qatar’s GDP of 4.1 percent in 2022, up from 1.5 percent in 2021 can also be attributed to the investors’ growing confidence,” the statement said.
GCC countries also bagged high spots in the emerging markets ranking with Qatar ranking fourth and KSA 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 statement added.
FDICI Global Rankings
According to the report, investors are cautiously optimistic about the global economy, with 82 percent planning to increase their foreign direct investment (FDI) in the next three years.
“While investors are generally optimistic about the outlook for FDI, our results this year also reflect a degree of caution,” report co-author Erik R. Peterson, Partner and Managing Director of Kearney’s Global Business Policy Council said. “Investors cited a rise in commodity prices, an increase in geopolitical tensions, and rising political instability in emerging markets as among the top risk factors over the next three years.”
FDI is seen as important for corporate profitability and competitiveness. The United States (USA) continues to be the top-ranking country for FDI, followed by Canada, Japan, Germany, the United Kingdom (UK), and France. Developed markets remain the preferred destination for investment, with 19 out of 25 countries on the Index being developed markets.
The report also highlights that business leaders see globalisation as the central force behind FDI, with 66 percent anticipating an increase in globalisation in the next three years. This is driven by digital infrastructure and growing trade opportunities with limited barriers. However, investors acknowledge that globalisation is changing.
“While our findings show investors believe in the benefits of globalisation and expect it to strengthen, they also anticipate more regionalisation over the next three years and that national governments will pursue strategies to increase self-sufficiency,” says report co-author Terry Toland, manager at the Global Business Policy Council.
“These results suggest an awareness that while globalisation will continue, its nature may be shifting—and business leaders will need to prepare accordingly.”
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