Spate of pro-investor reforms to drive UAE FDI surge in 2022

Foreign direct investment flow into the UAE is expected to see a significant surge in 2022 driven by enhanced pro-investor business environment, excellent infrastructure and predictable policies, the Institute of International Finance said on Sunday.
Investor sentiment towards GCC states in general and the UAE in particular will improve further due to higher oil prices. As a result, the consolidated current account surplus will widen to $182 billion in 2022, equivalent to 10 per cent of GDP, the IIF said Capital inflows will moderate in 2022 and 2023, as sovereigns are expected to issue less due to improving fiscal balances. Government-Related Entities (GREs) and the financial sector are expected to slightly increase their debt issuance
“Under the assumption of oil prices averaging $75/b in 2022, the combined current account surplus will surge from $131 billion in 2021 to $182 billion in 2022, equivalent to 10 percent of GDP. Also, the fiscal situations are now on a firmer footing. The expected improvement in non-hydrocarbon revenues, recovery in volume of oil exports, higher oil prices, and continued restrained spending will lead to consolidated fiscal surplus of about three per cent of GDP in 2022 and 2023,” said Garbis Iradian, chief economist, International Institute of Finance
For the UAE in particular, 2022 will see it better positioned as one of the best destinations for FDI in the wake of a string of investor friendly reforms.
The UAE was the world’s 15th-biggest recipient of foreign direct investment in 2020, ranking one place above the UK and seven places higher than the prior year, according to the UN Conference on Trade and Development