UAE on the up in global KPMG economic growth prospects index

29 July 2019 3 min. read

The United Arab Emirates has improved its ranking in KPMG’s annual growth indicators report, closing in on the top 20 countries worldwide.

Now into its fifth edition – but assessing data stretching back for the past two decades – the annual Growth Promise Indicators (GPI) report compiled by global professional services firm KPMG provides investors and policymakers with an objective international benchmarking tool on a range of factors contributing to nation’s economic growth prospects.

Centered around the key pillars of macroeconomic stability, openness to catch-up, quality of infrastructure; human development, and quality of institutions, with data derived from a number of independent global sources, KPMG then derives a weighted overall GPI score for 180 nations across the globe. With year-on-year rankings relatively stable at the top of the table, the UAE has this year shown significant improvement, moving up three spots to 22nd overall.

Overall the rankings were led by Switzerland, with a composite GPI score of 8.63, followed by the Netherlands and Singapore, with a number Northern European nations dominating the top ten. In comparison, the UAE achieved a GPI score of 7.23, up from 6.81 last year. The improvements for the UAE came chiefly from a rise in its quality of infrastructure, while the nation earned its highest score in macroeconomic stability for a top 15 category finish.

Country pillar scores“It is encouraging that the UAE scores well on pillars like infrastructure development, macroeconomic stability and openness, indicating its potential for businesses and investors,” said  KPMG Lower Gulf’s Head of Advisory Vikas Papriwal of this year’s results. “Equally, it speaks to the nation’s commitment to large-scale sustainable growth, technology and innovation, and social development programs.”

Other nations in the Middle East however have seen significant slides in their rankings from last year, with the next highest regional place-getter, Qatar, falling from 34th to 48th on the back of a drop in overall GPI to 5.68 – down from 6.04 and driven by declines in in its quality of infrastructure and institutions ratings. Oman, too, slipped from 47th to 56th, although improved its overall score from 5.33 to 5.58, while Bahrain plummeted from 40th to 57th.

Although it fell heavily in the rankings, the Kingdom did however achieve its highest scores in economic openness and quality of institutions, yet was hampered by a rating of just 2.88 for macroeconomic stability and falling quality of infrastructure – an area in which country is likely set to improve as the Bahrain Metro Rail project gets underway, with KPMG one of the consultancies still in the running for an advisory contract.

“The index showcases that top performing countries globally that have been able to lay the foundations for solid growth are the ones to follow,” said KPMG Bahrain’s Head of Advisory Ramachandran Narayanan, citing smaller nations such as South Korea and the UAE. “In Bahrain, openness of the economy and the quality of institutions have led to the Kingdom’s ranking in the top 60, whereby both are important factors in promoting sustainable economic growth.”