The UAE has been ranked as the best country in the Arab world in terms of attraction of Foreign direct investment (FDI) for 2021, according to a new report.
The United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2022 is one of the most comprehensive reports into FDI.
Its data shows that the UAE remained the largest recipient of FDI in the Arab world with flows increasing from $19.88 billion (AED73 bn) in 2020, to $20.7bn in 2021.
The report showed that total global flows of FDI recovered to pre-pandemic levels last year, reaching $1.58 trillion, an increase of 64 percent compared to 2020.
“The recovery showed significant rebound momentum, with booming merger and acquisition (M&A) markets and rapid growth in international project finance because of loose financing conditions and major infrastructure stimulus packages,” the report said.
However, the picture isn’t so positive now as “the global environment for international business and cross-border investment changed dramatically in 2022”.
The war in Ukraine and the lingering effects of the pandemic are causing a triple food, fuel and finance crisis in many countries around the world. Investor uncertainty could put significant downward pressure on global FDI in 2022.
“The 2021 growth momentum is unlikely to be sustained. Global FDI flows in 2022 will likely move on a downward trajectory, at best remaining flat,” UNCTAD warned.
The global market for sustainable funds experienced another year of exceptional growth in 2021. Sustainability-themed investments in global financial markets saw a 63 percent rise in 2021 to $5.2 trillion.