GCC Countries Attract $523.4 Billion In FDI, Reflecting Global Confidence
Foreign investment in GCC countries has steadily increased, with 2023 seeing foreign direct investment (FDI) reach $523.4 billion, excluding intra-GCC investments. This amount accounts for around 80 percent of total FDI stock, signifying global confidence in the Gulf's business environment. Additionally, in 2023, FDI inflows represented approximately 5 percent of worldwide flows.
The rise in intra-GCC investments from US$88.2 billion in 2015 to $130.3 billion in 202, equivalent to 20 percent of the total foreign investment stock, is attributed to improvements in infrastructure and technology. Modern legislation has also played a crucial role in enhancing the region's appeal as a global investment hub.
Despite a decrease in average oil prices from $82.5 per barrel in 2023 to $80.5 in 2024, the GCC's external merchandise trade managed to grow by 1.1 percent in 2024. This demonstrates resilience in the trade sector, even with fluctuating oil prices.
The region witnessed significant growth in non-oil exports, highlighting efforts to diversify the export base. Re-export activities also experienced consistent growth due to the region's advanced logistical infrastructure, further boosting trade activities.
GCC public revenues reached $670.2 billion in 2024, a 2 percent annual increase. Public spending stood at $659.3 billion, demonstrating the Gulf governments' focus on fiscal consolidation and channeling funds into development, infrastructure, and social protection.
The implementation of indirect taxes, like VAT and excise taxes, alongside digital advancements in public financial management, has increased the contribution of non-oil revenues to total public income. These efforts have helped manage public debt and reduce its servicing burden on government budgets.
Gulf capital markets showed positive performance in 2024, with market capitalisation reaching $4.2 trillion. This is despite global market uncertainties linked to tighter monetary policies in the United States. Improved corporate profits, reduced inflation, and a steady flow of institutional investments in key sectors supported this performance.
These financial strategies reflect the Gulf's commitment to enhancing economic stability and fostering growth, despite global economic challenges. The overall increase in both foreign and intra-GCC investments highlights the region's robust economic environment and its potential for sustained growth in the future.
Sign in with Google