UAE sees huge increase in foreign direct investment in 2024
The UAE has been named the world’s 10th largest recipient of foreign direct investment (FDI) in 2024, drawing in AED167.6bn ($45.6bn) in inflows, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2025.
This represents a 48% increase year-on-year; the UAE also accounted for 37% of all FDI inflows into the Middle East region in 2024.
Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE, and Ruler of Dubai said: “Out of every $100 invested in the region, $37 comes to the UAE. The country also ranked second globally, after the United States, in the number of newly announced foreign direct investment projects.
“Our next goal is to attract AED1.3tn ($354bn) in foreign direct investment over the next six years.”
He added: “Our foundation is strong, our future is promising, and our focus on our goals is crystal clear. Our message is simple: development is the key to stability, and the economy is the most important policy.”
The UAE also ranked second globally – after the United States– for the number of newly announced greenfield FDI projects, with 1,369 new initiatives valued at AED53.3bn ($14.5bn).
In contrast to a global slowdown in greenfield project growth (0.8%), the UAE achieved 2.8% growth.
The top sectors for greenfield FDI in 2024 included: software and IT services, 11.5%; business services, 9.7%; renewable energy, 9.3%; oil, gas and coal, 9%; and real estate, 7.8%.
Mohamed Hassan Alsuwaidi, Minister of Investment, said: “Recording this unprecedented level of FDI inflows to the UAE is an achievement that reflects the strategic choices made by our wise leadership and its long-term vision to establish the UAE as a leading global investment destination.
“The Ministry of Investment is committed to developing a comprehensive regulatory and legislative framework aligned with our national priorities, meeting investors’ needs, and providing a competitive business environment that attracts global capital.
“The UAE’s investment ecosystem has become a global model, thanks to its stability, transparency, trade openness, and ease of doing business. Through the National Investment Strategy 2031, we continue to set ambitious goals to cement the UAE’s position as a leading global FDI destination.
“We provide a clear pathway to drive sustainable growth, double investment opportunities, diversify priority sectors, and open new horizons for global companies seeking innovation and expansion in future markets.”
Google contributes 1% of UAE’s GDP
US tech giants are contributing billions to the UAE economy, with Google alone contributing about 1 per cent of the Emirates’ gross domestic product according to the global tech company.
Google contributed Dh21.8 billion ($5.93 billion) to the UAE’s economy in 2024, the tech major said in its Economic Impact Report for the Emirates. Google’s platforms, which include Search, Ads, Play, YouTube and Maps, support businesses, content creators, developers and government entities.
However, as their presence expands, a behavioural shift led by artificial intelligence tools is quietly reshaping how people work, search and consume information, the report said.
From cloud infrastructure and AI tools to payment platforms and productivity apps, companies such as Google, Microsoft and Apple are playing an increasingly central role in the UAE’s digital transformation.
Newly released economic impact reports from Google and Microsoft highlight the scale of this investment.
Google’s report shows widespread adoption, with 94% of adults in the UAE using Google Search at least once a month to compare prices, and 97% of public sector workers crediting Google’s AI tools with improving their productivity.
Microsoft’s study, released by the International Data Corporation, estimated that the company and its partners will generate Dh273 billion in new revenue for the UAE by 2028. This is supported by Dh18.7 billion in data centre spending and the creation of more than 152,000 jobs.
This includes more than 41,800 skilled IT roles, further solidifying the UAE’s position as a hub for advanced digital services and innovation.
This surge in tech investment aligns with the UAE’s National Artificial Intelligence Strategy 2031, which aims to position the country among the top AI nations globally and have the technology contribute 20% to non-oil GDP by 2031.
Trade deals with US and EU near finalisation, says India’s FM
Trade deals between India and the United States and the European Union are likely to be concluded soon, according to Union Finance Minister Nirmala Sitharaman, who pledged government support for exporters amid the challenging global environment.
“Intense trade negotiations are going on with the US and the European Union and should come to a conclusion sooner. Emphasis is being made on getting more free trade agreements signed,” Sitharaman said at Exim Bank’s Trade Conclave 2025 in New Delhi.
The finance minister pointed out that India’s total exports have touched an all-time high of $825 billion – a 6% growth over the previous year – despite difficult global trading conditions. “This is a significant leap of $466 billion over 2013–14,” she added.
Sitharaman acknowledged the continuing success of Indian exporters, saying: “I appreciate the Indian exporters putting in that kind of an effort, that they are still growing and are finding real success.”
The Finance Minister highlighted the fact that global trade was declining, with institutions such as the Organisation for Economic Co-operation and Development (OECD) and the World Bank projecting a fall-off. “Global growth in trade has suffered,” she said, adding that Indian exporters were “swimming against the current” despite the odds.
Her comments come at a time when India is looking to deepen its export base while navigating an uncertain global economic climate brought about by US President Donald Trump’s tariffs and broader geopolitical uncertainties.
Sitharaman reiterated the government’s commitment to supporting exporters through improved access to finance and structural reforms. “The government will give all support to exporters. Every year we have had serious challenges in global trade,” she said.
She pointed out that while global exports grew at 4%, India’s exporters managed a 6.3% growth,” she added.
Sitharaman pointed to the major steps the Indian government has taken to support exporters. “The first one is transport and logistics upgrades, which improve supply chain efficiency. Secondly, the government has provided targeted support to MSMEs. Third of the five is trade finance access,” she said.
Leading analyst expects India’s economy to grow at 6.5% in FY2026
S&P Global Ratings has revised India’s GDP growth forecast for the current fiscal year (FY26) upward to 6.5%.
This revision brings S&P’s projection in line with the Reserve Bank of India (RBI) prediction, which has forecast 6.5% growth for the financial year ending March 2026.
In its Asia-Pacific Economic Outlook report, S&P said India remains resilient to global shocks due to strong domestic demand and its relatively low exposure to goods exports.
“We see India’s GDP growth holding up at 6.5% in fiscal 2026. That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” the rating agency said.
In May, S&P had trimmed India’s FY26 forecast by 20 basis points to 6.3%, citing global uncertainties and the potential impact of higher US import tariffs.
S&P also flagged rising economic risks from the escalating conflict in the Middle East, especially if it leads to sustained high oil prices. The agency noted that such a situation could severely impact Asia-Pacific economies, including India, by slowing global growth and increasing the burden on net energy importers.
India is particularly vulnerable, as it imports nearly 90% of its crude oil and buys about half of its natural gas from international markets.
However, S&P played down fears of long-term disruptions, saying “Current conditions on global energy markets – which are well-supplied – make such long-term impact on oil prices unlikely.”
S&P also warned that the US tariff increases and the uncertainty surrounding them could hurt global trade, investment and growth, further compounding the risks to the global economic recovery.
China creating ecosystem that is ‘favourable for investors’
China is taking a long-term view over its economic development by investing both in technology and human capital, which is evident in the way new industries have evolved, according to Gim Huay Neo, managing director of the World Economic Forum (WEF).
Speaking ahead of the 2025 Summer Davos Forum in North China’s Tianjin municipality, Neo said the ‘ingredients’ in terms of policy coherence and consistency, availability of human capital, technology readiness and broader market support, are “pretty strong”, whether in green energy sectors or industrial transformation and advanced manufacturing.
“I think these various elements create an ecosystem that is favourable for investors as well as business partnerships,” she explained.
Neo also stated that the Chinese economy has been more resilient during a time of global economic uncertainty. She said Asia is expected to contribute about 60% of global GDP growth this year, with China to contribute around 30%. “So the outlook for Asia and China is still pretty strong,” she said.
Concerning rising global trade tensions, Neo said the WEF has a working group focused on trade and investment, seeking to bring businesses together with governments, academia and international organizations for constructive dialogue and forge win-win partnerships.
“I emphasize ‘win-win’ because we need to look for opportunities and collaboration areas where there can be benefits for everyone,” Neo said.
Neo said the WEF has a long-standing friendship with China, and that the forum hopes to continue working with the Chinese government, Chinese businesses and Chinese people to bridge conversations between China, Asia and the rest of the world.
“There is a lot of interest in Asia and China, and we hope to continue to be able to create the platform for constructive dialogue, for the exchange of ideas and perspectives, and to be able to catalyse new partnerships and bring about solutions to global challenges,” she said.
This year’s Summer Davos Forum, also known as the 16th Annual Meeting of New Champions of the World Economic Forum, was themed ‘Entrepreneurship in the New Era’ and focused on five key areas: deciphering the world economy; outlook on China; industries disrupted; investing in people and the planet; and new energy and materials.
China set to boost trade with central Asian partners
China and Central Asian countries have room to deepen economic and trade ties by expanding collaboration in fields such as digital trade and green development, while working to strengthen supply chain integration and regional connectivity in the next stage, industry experts have said.
China and the countries of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan have been deepening economic and trade collaboration, forging dynamic and beneficial partnerships in fields such as agriculture, energy, infrastructure and natural resources, China’s Ministry of Commerce said.
With China and Central Asian countries accelerating the implementation of the United Nations 2030 Agenda for Sustainable Development and reinforcing ties in areas of common interest, such as production capacity, transport and finance, experts said these moves will expand their economic collaboration from trade and investment activities mainly engaged in the energy, natural resources, infrastructure and agriculture sectors to more fields.
Wan Zhe, a professor specialising in regional economic development at Beijing Normal University, said that digital trade, as a core element of the digital economy, can effectively connect trade chains’ information channels, reducing transaction costs between countries.
Wang Jinguo, a professor at the Institute for Central Asian Studies of Lanzhou University in Gansu province, said collaboration among all parties in digital trade, sustainable growth and trade in services will lay the foundation for mutually beneficial collaboration, fostering an environment of broad consultation, collective contribution and shared benefits in the partnership between China and Central Asia.
“With Central Asian countries supporting green transition and having soaring demand for electricity, the region is in urgent need of substantial external funding and technology support,” Wang said. “China is well positioned to provide such help. It is likely that as we work together, investment between China and Central Asia will continue to grow.”
China’s direct investment stock in the five Central Asian countries exceeded $17 billion by early December, covering a range of sectors such as infrastructure, logistics, manufacturing, new energy, oil and gas exploration and telecommunications, the Ministry of Commerce said.
China’s trade with the five Central Asian countries surged from 312.04 billion yuan ($43.48 billion) in 2013 to 674.15 billion yuan in 2024, representing an increase of 116%, according figures from the General Administration of Customs.
New law ‘will boost confidence of private entities and drive growth’
China’s newly introduced Private Economy Promotion Law will help private enterprises overcome the challenges they face, including difficulties in obtaining finance and an uneven business environment, according to leading economists.
Speaking at a recent event organised by the Centre for China and Globalization in Beijing, Huang Hanquan, head of the Chinese Academy of Macroeconomic Research, said: “The law will boost the confidence of private entities and drive their growth. It will undoubtedly have a significant impact on the private sector and reinforce the economic foundation for Chinese modernisation.”
Huang emphasized that the law focuses on removing institutional barriers and breaks new ground to benefit China’s private economy. The economist said it was the first time the legal status of the private sector has been clearly defined, and also the first time promoting the sustainable and high-quality development of the private sector has been explicitly stated as a long-term national strategy.
On the issue of fair competition, Huang said that the law strengthens market evaluation systems and enforces fair competition rules, ensuring that private enterprises can compete on a level playing field.
Wei Chu, dean of the School of Applied Economics at Renmin University of China, commented: “Enterprises say this law will protect their rights, promote operational standardisation, and encourage innovation, while also improving the quality of government services.”
Based on his academic research and a recent survey of private enterprises, Wei pointed out that many companies still face barriers in infrastructure, access to public utilities, fair competition, and market entry. He said the new law regulates government behaviour and responds directly to these longstanding concerns.
“The law facilitates the establishment of a market-oriented risk-sharing mechanism for private sector financing, enabling banking institutions and credit guarantee providers to expand cooperation with private enterprises,” said Wang Peng, a researcher at the Beijing Academy of Social Sciences.
This mechanism diversifies risk through market-based approaches and mitigates financial institutions’ concerns about lending to private enterprises, thus facilitating greater capital flow into the private sector, Wang said.
The more dynamic private enterprises become, the stronger their innovation capability will be, generating greater willingness to collaborate with foreign-funded enterprises, he added.
The law provides institutional support for private enterprises to overcome technological barriers and integrate into global value chains by strengthening overseas IP protection, said Wang.
The law also encourages private enterprises to take the lead in undertaking major national technological research projects, he said, adding that this innovative mechanism injects new impetus into the development of global industrial chains by reducing research and development costs and accelerating the commercialization of technological achievements.
The Private Sector Promotion Law took effect on 20 May 2025. It encompasses nine key areas including key problems such as fair competition, investment and financing incentives, sci-tech innovation and intellectual property rights protections.
The legislation aims to optimize the development environment for the private sector, ensure equitable market participation for all economic entities, and foster the healthy growth of both private businesses and private entrepreneurs, the government said.
China set to explore further collaboration with UK
China’s economy is moving in a positive direction and presents strong opportunities for bilateral collaboration between China and the United Kingdom, according to Christopher Hayward, chairman of the policy and resources committee of the City of London Corporation.
“The way in which the economy of China is moving at the moment is in a positive way,” Hayward said at the recent 2025 Lujiazui Forum in Shanghai.
He said that greater openness will benefit both sides. “The more that China can open up, the better that will be for the Chinese economy. And certainly, we in the UK will want to support that. Part of our discussions with the Chinese government through the China-UK financial dialogue are around that.
“China has a great future – one which the UK wants to do business with. We want to trade with China. We see that as a great benefit to both of our countries,” Hayward added.
Malaysia climbs up 2025 World Competitiveness Ranking list
Malaysia has climbed 11 positions in the 2025 World Competitiveness Ranking (WCR) list, securing 23rd spot out of 69 economies – its highest placement since 2020.
The WCR, released each year by the Institute for Management Development in Switzerland, evaluates countries based on their ability to foster a supportive business environment and drive sustainable economic growth.
Malaysia’s advancement from 34th place last year highlights the country’s robust economic recovery and ongoing reform initiatives, according to the Ministry of Investment, Trade and Industry (Miti).
This progress supports Malaysia’s goal of joining the world’s top 12 most competitive economies by 2033, as set out in the Madani Economic Framework. The framework encourages innovation and inclusivity to strengthen Malaysia’s economy particularly in technology and productivity.
“This achievement is a clear indication that the Madani government’s reform efforts are bearing fruit,“ Prime Minister Anwar Ibrahim said in response to the WCR report.
According to the WCR, Malaysia’s enhanced global competitiveness is driven by strong economic performance, improved government efficiency, and more effective business operations.
The country now ranks fourth globally in economic performance – up four places from last year – while government and business efficiency factors each improved by eight positions.
International trade has also seen significant progress, climbing 11 places to rank sixth, due to robust export growth, diversified markets and increased tourism receipts, which together have strengthened Malaysia’s trade surplus.
At the strategic level, the National Competitiveness Committee, co-chaired by finance minister II Amir Hamzah Azizan, co-ordinates efforts across ministries to boost competitiveness.
At the same time, the Special Taskforce on Agency Reform ensures the effective implementation of more than 1,000 projects under the Public Service Reform Agenda.
Further, Miti emphasises that these bureaucracy-related reforms are closely linked to facilitating strong investment and industrial growth, both of which are essential for making Malaysia a more attractive investment destination.
With an ongoing commitment from federal and state governments and close collaboration with the private sector, Malaysia is well-positioned to achieve its goal of becoming one of the world’s 12 most competitive economies by 2033, Miti said.
New tax ‘may cause consumer price rises’
The upcoming expansion of the sales and services tax (SST), set to take effect on July 1, is unlikely to derail Malaysia’s economic growth, although it may trigger a short-term spike in consumer prices, analysts say.
Supportive domestic policies and targeted implementation are expected to cushion the broader impact of the expanded SST.
According to CGS International Research (CGSI Research), while the broader SST coverage is set to affect luxury goods and non-essential services –particularly those consumed by foreigners – it is designed to avoid burdening the average household.
“Based on our estimation, we deduced that the SST expansion could add 10 to 20 basis points (bps) to Malaysia’s annual consumer price index (CPI) this year,” the research house said in a note.
“In terms of trajectory, we expect a short-term spike in prices where the CPI could rise by 0.5% month-on-month in July and 2.2% year-on-year compared with 1.8% year-on-year in June, before peaking in September at around 2.4% year-on-year,” the research company said.
Nevertheless, CGSI Research maintained its full-year CPI forecast at 2% year-on-year, citing weaker global commodity prices as a mitigating factor.
The expansion of the tax, dubbed SST 3.0, follows the earlier SST 2.0 revision last year, which had minimal effect on economic growth.
This time, the government has widened the tax base to cover more luxury items and services equivalent to 12.9% of gross domestic product (GDP), while increasing sales tax rates on 64% of listed products.
“We think the negative impact of SST 3.0 on GDP growth this year should be modest due to support from wage reform and cash assistance,” CGSI Research highlighted.
“The expansion of the SST has been specifically curated to target high-income earners so that private consumption is unlikely to be negatively affected,” it pointed out.
India government sets sights on crypto users who avoid tax
India’s Income Tax Department is moving to ensure compliance among cryptocurrency investors, contacting thousands of individuals who have failed to declare their cryptocurrency transactions in their income tax returns. The initiative is part of a broader strategy to address potential tax evasion in the rapidly-growing digital asset sector.
With the rise of cryptocurrencies and non-fungible tokens (NFTs) – classified as ‘Virtual Digital Assets’ – the Indian government has toughened up the country’s tax regime. Gains from the transfer of these assets are taxed at a flat rate of 30%, irrespective of whether they are considered business income or capital gains. In addition, a 1% Tax Deducted at Source (TDS) is applied if the transaction values exceed certain thresholds. This ensures that the tax obligations are met upfront, reducing the chances of evasion.
The Income Tax department’s recent communication targets assessment years 2023-24 and 2024-25, focusing on taxpayers who might have omitted or misdeclared cryptocurrency income. The department said the new drive is part of its NUDGE campaign, which aims to remind taxpayers of their obligations under a ‘trust taxpayers first’ philosophy.
Official sources described the number of such individuals as ‘significant’, indicating a widespread issue of non-compliance. The campaign is designed to be non-intrusive, yet effective in guiding taxpayers toward fulfilling their tax responsibilities.
Jignesh Shah, a partner at Bhuta Shah & Co LLP, commented: “In India, the crypto investments – cryptocurrencies, NFTs and other digital tokens – are governed under the provisions relating to Virtually Digital Assets (VDAs). The provisions mandate a uniform tax rate of 30% (plus applicable surcharge and cess) irrespective of the nature of the income earned by a taxpayer.” This uniformity in taxation simplifies the process for both taxpayers and the authorities, ensuring clarity and consistency in tax compliance, he said.
Shah said the tax regulations also stipulate that any VDAs received as gifts are taxable in the hands of the recipient if the value exceeds Rs 50,000 (around £430) in a financial year. The Income Tax department is conducting data analytics to identify discrepancies between declared income and TDS returns filed by cryptocurrency exchanges, suggesting that some individuals could face ‘verification or scrutiny’. This proactive approach helps in maintaining transparency and accountability, reinforcing the government’s commitment to a fair tax system.
The tax authority said the measures reflect the government’s broader initiative to curb potential money laundering and unaccounted income through cryptocurrency investments. The current taxation framework does not allow for loss offsets against other income, underscoring the government’s effort to streamline revenue collection from this sector. This ensures that the tax system remains robust and effective in capturing the economic activities associated with digital assets. The government’s vigilance in monitoring compliance is crucial as the digital asset market continues to evolve, it said.
As the digital asset market continues to grow, investors are urged to comply with taxation requirements to avoid penalties. This initiative is the third in the Income Tax department NUDGE series, following previous campaigns on foreign asset declarations and the withdrawal of bogus deduction claims.
The government said that by fostering a culture of compliance, the Income Tax department “aims to build trust and ensure that all taxpayers contribute their fair share”.
It added: “The ongoing efforts to educate and guide taxpayers are pivotal in achieving long-term compliance and fiscal responsibility. The [tax authority’s] strategy not only focuses on enforcement but also emphasizes the importance of taxpayer education, which is crucial in a rapidly changing financial landscape.”
India’s 6.5% GDP growth in FY25 ‘creditable’ in face of global headwinds
India has managed to maintain healthy economic growth despite global economic and political volatility, according to India’s Chief Economic Adviser, V Anantha Nageswaran.
Speaking to news agency ANI, Nageswaran said: “The global context has become uncertain and complex. Economic and political conditions have turned unfavourable for growth. Given these situations, the Indian economy has maintained a good growth rate in 2024-25 at 6.5%.” For 2025-26, the government projects GDP growth in the range of 6.3%–6.8%.
Nageswaran noted that the gap between India’s growth rate and that of developed economies is now significantly wider than it was during the 2003-08 high-growth phase, when India expanded at 8%-9%.
“To achieve 6.5% on a steady basis in this environment is a creditable achievement. India is poised to maintain that track record,” he said.
UAE banking on AI investment to redefine economic future
The United Arab Emirates is investing heavily in artificial intelligence technology as part of a sweeping economic transformation plan, signing multibillion-dollar technology deals and launching a landmark AI partnership with the United States.
In a visit to Abu Dhabi in May, U.S. President Donald Trump’s signed commercial agreements worth more than $200 billion and committed to a further $1.4 trillion investment over the next decade, underscoring the UAE’s policy to anchor its non-oil economy in advanced technologies, including AI and cloud computing.
During the U.S. delegation’s visit to the Emirate the US-UAE AI Acceleration Partnership was announced, with the aim of deepening bilateral cooperation on artificial intelligence and related infrastructure.
“Bilateral trade talks focused on artificial intelligence, advanced technologies, and semiconductors, culminating in the launch of the US-UAE AI Acceleration Partnership,” said Vijay Valecha, Chief Investment Officer at Century Financial.
The Gulf nation also plans to invest in major U.S. AI firms including OpenAI and xAI, while Abu Dhabi-based Group 42 will build a five-gigawatt AI data centre, set to become the largest of its kind outside the United States.
The AI push forms part of a broader strategy to diversify the UAE economy away from hydrocarbons, the Arabian Business website has reported. Non-oil sectors accounted for 75% of GDP in the first nine months of 2024, according to the UAE Ministry of Economy, with the non-oil economy expanding 4.5%.
“The UAE’s projected [GDP] growth in 2025 stands in sharp contrast to a global outlook marked by mounting risks and downward revisions,” Osama Al Saifi, Managing Director for MENA at Traze, an online foreign exchange trading platform. “This divergence is largely explained by the UAE’s strong performance in non-oil sectors, supported by expansion in tourism, transport, construction, and financial services, as well as sustained momentum in foreign direct investment and trade.”
The International Monetary Fund expects the UAE’s economy to grow by 4% in 2025 and 5% in 2026, making it the fastest-growing economy in the Gulf Cooperation Council. In contrast, global trade growth is forecast to slow to 1.7% this year, with a possible recession in the U.S. or Europe still looming, according to analysts at JPMorgan and Fitch.
The timing of the UAE’s AI investment spree coincides with a deteriorating global economic outlook, according to Al Saifi. “The region is better equipped than in previous cycles, though not entirely shielded,” he said.
“A recession in the U.S. or Europe would likely exert downward pressure on global oil demand and weigh on fiscal performance. Nevertheless, substantial sovereign wealth assets, contained inflation, and firm domestic demand provide a degree of protection.”
The UAE’s inflation rate is expected to remain stable at around 2% in 2025, with consumer spending forecast to expand 4.3%, supported by easing interest rates and robust domestic demand, Al Saifi added.
Hamza Dweik, Head of Trading at Saxo Bank MENA, commented: “A mild recession in the U.S. and parts of Europe during the second half of the year is increasingly likely, as the delayed effects of tight monetary policy, persistent inflation, and weakening manufacturing data converge.
“However, the UAE’s strong macroeconomic fundamentals, active IPO pipeline, and diversified revenue streams position it as a relative safe haven in the global landscape.”
Meanwhile, PwC estimates the AI sector could contribute over $320 billion to the Middle East economy by 2030, with the UAE positioned to capture the lion’s share through early infrastructure deployment, regulatory reform and foreign investment attraction.
“Sectors with strong global linkages – such as logistics, real estate (particularly off-plan investment-driven projects), and non-oil exports like aluminum and petrochemicals – are most vulnerable to a potential U.S. recession,” Dweik said.
