Bahrain sees 73pc surge in foreign direct investment
Bahrain has seen a 73 per cent jump in foreign direct investment (FDI) to $1.8 billion in 2021, reveals the 2022 World Investment Report by the United Nations Conference on Trade and Development (UNCTAD).
Last year saw the kingdom record the second highest value in FDI inflows in a decade, and also outperform developing countries which were the largest recipients of FDI in 2021 at $837bn, up 30pc from 2020.
FDI in GCC rose by two-thirds to $44bn in 2021, with the region accounting for the lion’s share of flows to the larger West Asia region that pulled in a total of $55bn.
The growth was mainly driven by a significant rise in cross-border M&As, while the UAE remained the largest recipient with stable flows at $20bn.
These findings were presented by Astrit Sulstarova, chief trends and data section, investment research branch, division on investment and enterprise, UNCTAD at the Swiss Belhotel in Seef, during an event organised in partnership with the Mena Centre For Investment and the Economic Development Board.
The report documents the recovery of cross-border investment flows after the pandemic shock, looking at greenfield investment in industry, project finance in infrastructure, and international production activities of the largest multinationals, he said.
Total global FDI flows in 2021 were $1.6 trillion, up 64pc from 2020.
Cross-border deals and international project finance were particularly strong, encouraged by loose financing conditions and infrastructure stimulus.
However, the recovery of greenfield investment in industry remains fragile, especially in developing countries. This fragile growth of real productive investment is likely to persist in 2022.
Factors
Overall, UNCTAD foresees that the growth momentum of 2021 cannot be sustained and that global FDI flows in 2022 will likely move on a downward trajectory, at best remaining flat.
This projection takes into account the various downward pressures and potential stabilising factors.
According to the report, the kingdom’s inward FDI stocks increased by 6pc from 2020, reaching $33.47bn in 2021. With a GDP value of $38.8bn in 2021 according to the Information and eGovernment Authority, Bahrain’s FDI stock relative to GDP reached 86pc, ranking as the highest in GCC and surpassing the global average of 47pc.
Investment in 2021 was primarily directed at Bahrain’s financial services, manufacturing, and mining and quarrying industries, according to the Information and eGovernment Authority of Bahrain.
Khalid Humaidan, chief executive of the Bahrain Economic Development Board (EDB), said: “We’re proud of the progress achieved in 2021 and we look forward to achieving greater heights by attracting more direct investments across a diverse number of economic sectors, in line with the objectives set under Bahrain’s Economic Recovery Plan.”
In 2021, the EDB attracted $839 million in direct investment into Bahrain through successful projects that are expected to create 4,861 local jobs, including Citi’s first Mena tech hub.
In the foreword to the report, United Nations Secretary-General António Guterres said: “The fallout of the war in Ukraine with the triple food, fuel and finance crises, along with the ongoing Covid-19 pandemic and climate disruption, are adding stresses, particularly in developing countries.”
Source: https://www.gdnonline.com/Details/1114578
