Research
15 Jun 2022
2022 GCC Investment Sentiment Report
Insights for Building Resilience and Attracting Investment
A survey covering 628 companies in the GCC was conducted to understand the current investor sentiment, outlook for 2025 and discover the key drivers that impact investment decisions. While 80% of respondents are looking to expand business by 2025, only 39% of foreign subsidiaries and 73% of local companies, plan to invest in the GCC. Key themes impacting investment decisions, and practical considerations that can help policy makers improve attractiveness of the GCC countries have been explored.
The survey revealed 6 key findings:
- Larger economies and companies were more resilient where 54% of the companies experienced positive growth
- Efficient and innovative companies performed better than their peers where 71% of respondents attributed positive growth to internal initiatives
- Positive outlook for 2025 where 79% of respondents indicate that they plan to expand their business
- Local investors prefer to invest locally while 61% of subsidiaries of foreign companies operating in the region prefer to invest and expand globally
- Investors who chose to invest abroad, new players in MENA are emerging as attractive investment destinations: 52% of the respondents who chose Egypt as an expansion destination were Saudi
- We have deduced that investment decision is driven by 4 key themes:
- 63% of companies mentioned factors related to Business environment and ease of business set-up and operation.
- 69% of companies focused on factors related to Cost incurred while conducting business.
- 68% of respondents mentioned issues related to Risks to growth, profitability, or viability of the business.
- 77% of respondents mentioned factors that relate to Opportunities and potential for growth in the market
The survey provided 3 emerging guiding principles for the GCC decision-maker:
- Smaller economies need to work more to achieve resilience: Smaller economies and companies have less room for error and need to be more thorough in where they apply their efforts if they want to remain resilient.
- Productivity & efficiency are key drivers: Smaller companies who adopt better productivity initiatives will outperform their peers.
- Companies are not geographically bound anymore: Organizations look away from their current market to get the full factors of growth they desire.
6 Key Considerations for the decision makers have emerged:
- Continue and expand business environment reforms
- Expand reforms to be more holistic and consistent in a way that government policies need to be flexible, and quick, when responding to the private sector requirements.
- Improve market attractiveness, even if your economy is large and resilient
- Do not forget the local investor
- Give special attention to the private sector access to talent
- Encourage companies to improve internal efficiency
