Ongoing economic and business-related reforms helped the United Arab Emirates and Saudi Arabia post the biggest jumps in Kearney’s 2024 Foreign Direct Investment Confidence Index. The countries climbed ten spots from 2023, to eighth for the UAE and 14th for Saudi Arabia.
First published in 1998, 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.
This year’s Index reflects investor optimism with,
“A striking 88 percent said they were planning to increase their FDI in the next three years—6 percent more than last year. Furthermore, 89 percent—up from 86 percent in 2023—said they regarded FDI as more important to their corporate profitability and competitiveness in the next three years. And the level of net optimism on the global economy rose markedly as well. While the optimism level grew only marginally to 64 percent, net pessimism decreased notably from 35 to 29 percent compared with last year.”
While the United States took the top ranking for the 12th consecutive year based on it being the fastest growing G7 economy and rebounding consumer sentiment, some emerging markets made great strides in the Index.
“Overall, this year’s survey revealed investors’ preference for developed markets, which accounted for 17 out of 25 of the markets on the Index. However, emerging markets continue to build their presence on the list, with the United Arab Emirates and Saudi Arabia in particular experiencing meteoric rises from 18th to 8th and 24th to 14th, respectively.”
In terms of emerging markets overall, this was the second annual ranking done by the Kearney FDI Index team.
“China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland, and Argentina make up the top eight positions, and they are the only emerging markets included in the world rankings. Regionally, the Americas has the most markets on the list with nine, followed by Asia Pacific at seven, the Middle East and Africa at five, and Europe at four. Southeast Asia continues to show its strength, with Thailand, Malaysia, Indonesia, and the Philippines all among the top 15. Seven of the 25 markets on the Index— Poland, Chile, Romania, Peru, Hungary, Uruguay, and Oman—joined the list for the first time.”
Commenting for a Bloomberg article, Terry Toland, a consultant at Kearney and co-author of the report noted that, it’s a “remarkable shift for the region.” Economic performance and efforts to become new hubs for technology and artificial intelligence were also likely at play, he said. Both the UAE and Saudi Arabia are setting up firms to invest in those sectors as part of efforts to diversify their economies.
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