FDI into Dubai likely to remain strong in 2022

FDI into Dubai likely to remain strong in 2022

Posted on 6 May 2022

Dubai’s handling of the pandemic and business reforms has put the emirate in a good position to draw in further foreign direct investment

Strong foreign direct investment flows into Dubai are likely to continue throughout 2022 as it continues to manage the Covid-19 pandemic well and on the back of business reforms in the Gulf city, experts told Arabian Business.

Dubai, the financial hub of the United Arab Emirates, raked in AED15.9 billion ($4.3bn) in foreign direct investment across 378 projects in the first nine months of 2021, making it the third most popular destination for FDI globally.

“Although competition for global FDI will intensify, reforms implemented over the past year in Dubai and across the UAE stand the economy in good stead. FDI inflows to Dubai are likely set for another strong year,” Scott Livermore, ICAEW economic advisor and chief economist and managing director, Oxford Economics Middle East, said.

Meanwhile, analyst Omar Al-Ubaydli pointed to the emirate’s steady handling of the pandemic, which was recognised internationally as one of the best.

“A central component of this successful strategy is the competent management of the pandemic, which has made many elite expatriates seriously consider the UAE as a permanent domicile,” Al-Ubaydli, who is the director of research at Derasat, told Arabian Business.

Dubai has opened the doors to freelancers, retirees and implemented initiatives to attract more creatives and tech-industry players to the city. One real estate insider recently told Arabian Business that the city had the “ingredients” to be a successful second-home market for wealthy individuals.

“Global FDI bounced back last year from its 35 percent fall in 2020 during the peak of the Covid crisis, and Dubai seems to have increased its share. This reflects the Dubai economy is open and the return of normal activity, which appears to have happened faster than elsewhere in the world,” Livermore said.

Dubai’s economy has rallied back faster than many other countries as recovery from the pandemic continues, and the emirate has introduced “aggressive reforms targeting foreign investors,” Al-Ubaydli said.

Investors have taken note, turning to the Gulf.

“The longer Western governments struggle with the pandemic, the deeper the advantage the UAE will forge,” Al-Ubaydli said.

FDI reinvestment projects accounted for 11 percent of the total FDI projects in the emirate. FDI job creation witnessed a huge growth of 36 percent during the first nine months of 2021 compared to the same period last year, as 16,430 new jobs were created compared to 12,090 jobs in the same period prior to last year. As much as 58 percent of the inbound FDI is in strategic sectors and 52 percent is in greenfield projects, or projects developed on a vacant site, according to data released by the Dubai Investment Development Agency.

“Global FDI flows are expected to continue to recover in 2022,” Livermore said.

SOURCE: arabianbusiness.com

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