RIYADH: As both countries remain major beneficiaries of inflow of funds, Saudi Arabia is predicted to overtake UAE in receiving foreign direct investment in 2023, according to a recent industry report.
In 2022, FDI into Saudi Arabia and the United Arab Emirates is set to reach a record high of $40 billion, up 58 percent from the previous year, according to a Lumina Cross-Border Insights report.
According to the report, infrastructure and engineering, tourism and hospitality, and clean/renewable energy, especially megaprojects in Saudi Arabia, will be the key MENA projects driving FDI and UK-to-Middle East investment in 2023.
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For example, the top seven infrastructure projects in Saudi Arabia will cost $690 billion to build. These projects include Neom, Roshan, Diriyah Gate, Jeddah Central, Red Sea Project, AlUla and Qidiya.
For aspiring global firms to benefit from this growth, regional presence is now seen as a necessity rather than a good. Two-way investment between the Middle East and Europe will generate a record level of FDI in 2023, the report said.
The year 2023 is expected to be another record year for foreign direct investment in the Middle East as international corporations and funds put down roots there and talent continues to flow in.
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Deal-making, according to the report, is anticipated to flourish as a result of the global mergers and acquisitions environment largely led by resilient regional sectors over the past year.
According to the report, existing partnerships in the region will undergo a significant change as businesses in the UK evaluate joint ventures in the Middle East to determine their current relevance.
The first half of 2023 will be a tale of two parts, with highly active Middle Eastern corporates and funds continuing to invest in European businesses, while domestic markets continue to experience varying levels of economic volatility.
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According to Andrew Nicol, partner at Lumina Capital Advisors, this will create huge investment opportunities to diversify globally and gain access to top-tier skills and talent.
Global demand for natural resources, including oil, will be driven by an improvement in sentiment in developed markets in the second half of the year. The field is in an excellent position for the coming year to be successful.