FDI inflows to Arab countries drop due in 2022

(Photo: AI-Generated)
AMMAN — In 2022, both foreign direct investment (FDI) inflows to Arab countries and global FDI inflows experienced declines. According to the Arab Investment and Export Credit Guarantee organization, known as "Dhaman," FDI inflows to Arab countries reached $54 billion, a decrease of 3 percent, while global FDI inflows amounted to $1.3 trillion, a decrease of 12.3 percent.اضافة اعلان

Dhaman attributed this decline to several factors, including the ongoing Russian-Ukrainian conflict and its impact on the international economy, increasing inflationary pressures, and tightening global financial conditions, the Jordan News Agency, Petra reported.

Accounting for 4.2 percent of the global investmentsThe organization's annual report reveals that Arab countries accounted for 4.2 percent of global investment inflows and 6 percent of investment inflows to developing nations in the past year.

Breaking down the investment inflows received by Arab countries, the United Arab Emirates (UAE) attracted the highest amount, with $22.7 billion (42.3 percent). Egypt followed with $11.4 billion (21.2 percent), Saudi Arabia with $8 billion (14.7 percent), Oman with $3.7 billion (6.9 percent), Morocco with $2.1 billion, Bahrain with $2 billion, and Mauritania with $1.1 billion.

Furthermore, Dhaman's report highlights that FDI’s balances flowing into Arab countries increased by 4.4 percent by the end of 2022 compared to 2021, surpassing $1 trillion. This data is based on information from the United Nations Conference on Trade and Development (UNCTAD).

Saudi Arabia in the leadAccording to UNCTAD, three Arab countries accounted for over 57 percent of the total cumulative balances entering the Arab region. Saudi Arabia led the list with balances amounting to $269 billion, representing 25.2 percent of the overall balance. The UAE followed with $194.3 billion (18.2 percent), and Egypt with $149 billion (13.9 percent).

Conversely, FDI outflows from Arab countries experienced a significant decline of 54 percent in 2022, amounting to $23.3 billion. This downward trend was driven by negative investment flows, including the liquidation of external investments worth $25.6 billion in Kuwait, according to UNCTAD data.

By the end of 2022, foreign direct investment balances issued by Arab countries increased by 10.7 percent, reaching $590 billion. Five Gulf countries, namely the UAE, Saudi Arabia, Qatar, Kuwait, and Bahrain, contributed 89 percent of the total balances issued in the Arab region.

Regarding cross-border merger and acquisition deals in Arab countries throughout the year, the sales value of these deals in nine Arab countries reached $36 billion, accounting for 5.1 percent of the global total of over $706 billion. Notably, Saudi Arabia, Bahrain, the UAE, and Egypt were among the countries with significant sales deals.

On the other hand, the value of purchase deals in eight Arab countries exceeded $28 billion, with Kuwait, the UAE, Saudi Arabia, and Lebanon contributing more than 96 percent of the total value. 

Read more Business
Jordan News