Qatar has seen a surge in Foreign Direct Investment (FDI) outflows of 1391% year-on-year (y-o-y) from a mere $160mn in 2021 to $2.38bn in 2022, Emirates NBD research has said in a report.
In the Gulf Cooperation Council (GCC) region, Qatar came in third in terms of FDI outflows last year, the report noted.
The GCC region achieved a net positive FDI of $15.25bn in 2022, after a substantial surge of 369% y-o-y.
However, this net positive in Foreign Direct Investment for the region is mainly attributed to the substantial decrease in FDI outflows by Kuwait, rather than an increase in FDI inflows.
In fact, the total FDI inflows in the region experienced a 18% y-o-y decline, dropping from $45bn to $37bn. The region’s decline in FDI inflows parallels the global decline in FDI, which were down by 12% in 2022 according to UNCTAD’s ‘World Investment Report 2023’.
Foreign Direct Investment (FDI) has been at the heart of the GCC countries’ economic vision to grow their economies and diversify away from oil and gas, Emirates NBD said.
The region has achieved significant success in deploying capital in various asset classes across the globe, evident from the prominent position of GCC sovereign wealth funds, which consistently make headlines and rank amongst the largest globally. Nevertheless, when it comes to attracting capital to the region, there is still a lot of room for growth.
Meanwhile, the UAE led the GCC region in FDI inflows in 2022, attracting $22.73bn, representing a 10% y-o-y increase. Dubai accounted for approximately half of the total FDI inflows, attracting $12.8bn.
The top five sectors for FDI inflows in Dubai in 2022 were transportation and warehousing with a 45% share, hotels and tourism and alternative/renewable energy with a 9% share each, software and IT services accounting for 8%, and consumer products with 5%.
Saudi Arabia came in second place amongst its GCC neighbors in total FDI inflows with $7.89bn in 2022, a decline of 35% y-o-y. Saudi Arabia’s decline in FDI inflows comes after a record figure of $19.29bn in 2021, the highest in the Kingdom’s history, which can be attributed to the privatisation law passed to facilitate public private partnerships and ease of regulations for foreign investors. The privatisation law has enabled Aramco to sell a 49% stake in its pipelines for $12.4bn to a consortium led by the US-based EIG Global Energy Partners. The Aramco deal accounted for 65% of the total FDI inflows in 2021.
Oman followed in third place with $3.72bn, down 8% y-o-y.
