Dubai recorded $6.73bln FDI in 2020; 455 projects created 18,325 jobs

The emirate also achieved a record global market share in greenfield FDI projects

  
Port of Dubai Marina to the Blue Hour on the skyline. Image used for illustrative purpose.

Port of Dubai Marina to the Blue Hour on the skyline. Image used for illustrative purpose.

Getty Images

Dubai was among the top global FDI destinations in 2020, ranking first in the Middle East and North Africa (MENA) region and fourth globally in attracting greenfield FDI capital, according to the Financial Times’ fDI Markets. 

Data from the Dubai FDI Monitor released by the Dubai Investment Development Agency (Dubai FDI) revealed that FDI inflows worth AED24.7 billion ($6.73 billion) supported 455 projects in 2020 and an estimated 18,325 new jobs were created last year on the back of inbound FDI.

The 455 FDI projects implemented in Dubai in 2020 exceeded the annual average of 441 over the past five years, reaffirming Dubai’s strong FDI location fundamentals as well as its economic resilience.

Economic potential

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council of Dubai, said: “Dubai’s sustained FDI flows and its leading position in regional and global rankings as a major FDI destination in 2020, reflect the continued attractiveness of Dubai’s investment environment and the confidence of the investor community in Dubai’s future economic potential.”

Dubai also achieved a record global market share in greenfield FDI projects, attracting 2.1 percent of all such projects in 2020, exceeding the 2 percent mark for the first time.

Global FDI "collapsed" in 2020, falling 42 percent from AED5.5 trillion in 2019 to an estimated AED3.15 trillion, according to the Global Investment Trends Monitor published in January 2021 by the UN Conference on Trade and Development (UNCTAD)

Dubai’s economy, which is heavily reliant on tourism, transportation and retail shopping, has been hit hard by the COVID-19. According to S&P Global Ratings, the emirate's economic recovery will be subdued, and its GDP will return to 2019-level only in 2023.

Dubai's real GDP contracted by 10.8 percent last year. The economy is expected to recover this year, thanks to Expo 2020, which the emirate delayed last year due to the pandemic and will now take place from October this year to March 2022, S&P noted.

According to the IHS Markit Purchasing Managers’ Index data for March 2021, firms in Dubai are confident of a rise in business activity for the rest of the year as the economy continued to recover from the COVID-19 pandemic.

“Dubai’s success in combating the COVID-19 pandemic and starting the recovery phase in record time is a testament to our commitment to provide the best investment environment in the world and transform global challenges into new opportunities for growth, driven by technology and innovation, and powered by Emirati and global talent, making Dubai the best place in the world to work, live, and invest,” Sheikh Hamdan said.

Fahad Al Gergawi, Chief Executive Officer, Dubai Investment Development Agency (Dubai FDI), said: “While we take pride in Dubai’s achievements as a leading FDI Global City of the Future 2021/2022, we also take inspiration from the hundreds of investors that choose to invest in Dubai to grow their future business sustainably, despite the unprecedented global challenges of 2020.”

Source countries, sectors

The US was the top source country, accounting for 21 percent of FDI capital and 22 percent of FDI projects.

France (16 percent), Japan (11 percent), the UK (7 percent), and Germany (6 percent) made up the rest of the top five source countries for FDI capital into Dubai in 2020.

The top five sectors with FDI flows, accounting for 69 percent of the total estimated FDI capital flows into Dubai in 2020, were Accommodation & Food Services (40 percent), Electric Power Generation (13 percent ), Other Information Services (8 percent), Healthcare & Social Assistance (4 percent), and Retail & Whole Trade (4 percent).

(Writing by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@refinitv.com)

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© ZAWYA 2021

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