UAE takes second place after US in Greenfield FDI project announcements in 2023

The latest World Investment Report (WIR 2024) by the UN Conference of Trade and Development (UNCTAD) has highlighted that global foreign direct investment (FDI) fell by 2% to $1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions.

The downturn in project finance affected sustainable development, with new funding for Sustainable Development Goals (SDGs) sectors dropping over 10%. This hampers efforts to achieve the 2030 Agenda and calls for urgent policy action.

Tight financing conditions led to a 26% drop in international project finance deals, critical for infrastructure investment. International project finance significantly help poorest countries, making them more vulnerable to the global downturn in this type of investment.

Global foreign direct investment fell by 2% to $1.3 trillion in 2023, according to the @UNCTAD World Investment Report.

New funding for #GlobalGoals sectors dropped by 10%.

Business facilitation & digital government solutions can address low investment.▶️https://t.co/fW4Yig24Op pic.twitter.com/YIaBcqs71o

— UN Trade and Development (@UNCTAD) June 20, 2024

UAE secures second spot in new FDI projects in 2023

The UAE took second place globally in Greenfield FDI project announcements in 2023 at 1,323, an increase of 33% compared to the year before, according to the latest report by UNCTAD. The US comes first in the list.

The Gulf state gained a couple of places in the ranking of top destinations for Greenfield projects, since entering the top five in 2022. In terms of foreign direct investment (FDI) inflows in 2023, the nation attracted $30.688 billion in a year-on-year growth of 35%.

The report also highlighted that the UAE’s FDI outflows stood at $22.328 billion in 2023 compared to $24.833 billion in the year before. FDI outflow stock increased to $262.208 billion last year from $239.880 billion in 2022.

UAE is third largest contributor to Bahrain FDI stocks

According to WIR 2024, Bahrain attracted a record FDI inflows of USD 6.8 Billion in 2023. This contributed in the growth of cumulative inward FDI stocks resulting in Bahrain achieving one of the highest ratios of FDI stocks in the world at 99.7%.Read more: https://t.co/CnOxgrD86I pic.twitter.com/bwUFsp6VQk

— Bahrain EDB (@bahrainedb) June 20, 2024

The UAE contributed 10% of Bahrain’s FDI stocks in 2023, taking the third place. Bahrain Economic Development Board issued a statement noting that the country has secured a record $6.8 billion FDI inflows last year, as per the latest WIR 2024.

Marking one of the highest ratios across the globe, Bahrain’s FDI stocks relative to GDP stood at 99.7% as of the end of 2023, a figure substantially higher than the global average of 46.9%. The top contributors include Kuwait (36%), Saudi Arabia (23%) and the UAE.

The milestone FDI inflows reflect the “strength of Bahrain’s value proposition and continued standing as a trusted destination of choice for regional and global investors seeking best value operating costs in a strategic location,” said the Chief Executive of Bahrain EDB.