UAE Ascends in Global FDI Confidence Index Amid Diversification Drive

UAE, 05 April, 2024 :  The UAE has ascended on Kearney’s 2024 Foreign Direct Investment (FDI) Confidence Index, now standing at eighth place, up from 18th, solidifying its position as the Arab world’s second-largest economy. This upward trajectory reflects the UAE's concentrated efforts toward economic diversification, attracting global investment.

Rudolph Lohmeyer, partner at National Transformations Institute, Kearney Middle East, attributes the higher ranking to the UAE's resolute push for economic diversification and sustained policy reforms, fostering investor confidence. The UAE's economy has maintained growth, buoyed by initiatives targeting sectors like manufacturing, tourism, and technology, with an expected 4.2% growth this year according to the UAE Central Bank.

In 2022, the UAE recorded approximately $23 billion in FDI, with last year's figures yet to be released. Moreover, the UAE ranked second globally in greenfield FDI, following the US.

The country has set ambitious goals, aiming to attract Dh550 billion ($150 billion) in foreign investment by 2031, positioning itself among the world's top 10 FDI destinations. Additionally, it is forging Comprehensive Economic Partnership Agreements to enhance trade and bolster investment.

Despite fierce global competition, the UAE's resilience, advanced infrastructure, robust capital markets, and thriving tech ecosystem make it an enticing prospect for investors, as emphasized by Mr. Lohmeyer.

The US maintains its top position in the FDI index, trailed by Canada. China, buoyed by relaxed capital controls in key cities, rose to third place. Japan, grappling with economic challenges, slid to seventh.

While developed markets dominate investor preference, emerging markets like the UAE and Saudi Arabia are rapidly gaining traction, signaling a shift in investment patterns.

Saudi Arabia, driven by its Vision 2030 agenda, is also diversifying its economy, experiencing an upward trajectory in Kearney’s emerging market index, rising to third place from sixth.

Kearney's annual survey, encompassing global business executives, indicates robust investor optimism, with plans for increased FDI over the next three years. However, geopolitical tensions and regulatory concerns pose risks, even as artificial intelligence emerges as a key factor in investment decision-making, with 64% of respondents expecting expanded AI use in the next three years.

Source :www.thenationalnews.com