The UAE has undertaken a comprehensive journey to diversify its economic landscape in recent years. This transformational effort aims to reduce reliance on oil revenues and foster sustainable growth across various sectors, significantly boosting the country’s economic growth.

The UAE has secured a significant leap in Kearney’s 2024 Foreign Direct Investment (FDI) Confidence Index, jumping from 18th to 8th place. 

The UAE also secured the runner-up spot on Kearney’s emerging market index, second only to China, the world’s second-largest economy. This represents an improvement from its third-place position last year.

“This impressive ranking is a clear reflection of its decisive push towards economic diversification, which [has] firmly cemented the UAE’s position as a magnet for global investment,” explained Rudolph Lohmeyer, partner at National Transformations Institute, Kearney Middle East. 

The UAE Central Bank projects a 4.2% economic growth for the current year. Moreover, the country achieved an FDI of approximately $23 billion in 2022, with official figures for 2023 yet to be released. Notably, the UAE ranked second globally, following the US, in attracting greenfield FDI last year.

As part of its diversification strategy, the Emirates has set an ambitious target of attracting $150 billion in foreign investment by 2031, propelling it into the top 10 FDI destinations worldwide. Additionally, the country is actively signing Comprehensive Economic Partnership Agreements with various nations to stimulate trade and further attract investment.

While the Kearney survey reveals a general investor preference for developed markets, with 17 out of the top 25 spots occupied by them, emerging markets are gaining traction.

In particular, the UAE and Saudi Arabia witnessed significant improvements, rising to 8th and 14th positions, respectively, from 18th and 24th last year. Like the UAE, Saudi Arabia, the world’s largest oil exporter, is also undergoing an economic transformation driven by its Vision 2030 diversification plan.

The survey results indicate sustained investor optimism, with potential for further growth in the next three years. A significant 88% of respondents plan to increase their FDI within this timeframe, reflecting a 6% rise compared to last year.

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