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July 24, 2019
The UAE offers the best growth prospects among the Arab countries, even better than bigger economies such as China, India and South Korea, according to a new report released on Monday.
KPMG's 2019 Growth Promise Indicators (GPI) report said the UAE jumped three places to 22nd position among 180 countries, thanks to infrastructure development, particularly in transport and human development.
The study rates countries on the basis of macro-economic stability, openness, quality of infrastructure and institutions and human development.
Barring quality of institutions, the UAE's score improved year-on-year on all of the sub-indexes, the KPMG data showed. In fact, the UAE scored higher than countries like Norway and Sweden on macroeconomic stability, which assesses countries progress according to their levels of national debt and budget deficit, and how successfully governments manage public finances.
The report attributed the UAE's Vision 2021 programme as a key driver of growth, as it supports development of reliable, sustainable and resilient infrastructure - including regional and transborder - to support economic and social development.
Vikas Papriwal, head of advisory at KPMG Lower Gulf, said there is evidence that the UAE's efforts to develop infrastructure and diversify the economy are paying off.
"It is encouraging that the UAE scores well on pillars like infrastructure development, macroeconomic stability and openness, indicating its potential for businesses and investors. Equally, it speaks to the nation's commitment to large-scale sustainable growth, technology and innovation, and social development programmes," he said.
Atik Munshi, senior partner at Crowe UAE, said considering thorough and whole-hearted efforts put in by the UAE government, it is not a surprise that the country's ranking on growth indicators has moved positively and will likely to rise further.
"The forward looking and inclusive view of the state has lead them to come out with plans like Abu Dhabi's vision 2030 and Dubai's Smart government initiative. Necessary investments have been made by the UAE in all such areas which are conducive to economic and social growth. The political stability, happiness initiative and excellent infrastructure coupled with the near zero tax regime has done wonders to attract foreign talent and investment into the country. It is very likely that UAE will further rise to top 20 country list in the next year," he said.
Recently, AT Kearney's Global Cities Index 2019 also raised the outlook of Dubai by 10 positions to 32nd while Abu Dhabi's ranking jumped even higher by 30 positions to 20th in terms of personal well-being, long-term investment and GDP growth, innovation, transparency, ease of doing business ratings.
The GPI report by KPMG also indicated that an economy equipped with a strong workforce has the potential to grow more quickly.
The UAE performs well in strong workforce sub-index, thanks to easier access to the labour required to power the economy as it expands. In addition, the manpower is also equipped with the right skills and knowledge to accelerate growth.
Yael Selfin, chief economist at KPMG in the UK, said the importance of stable institutions and their role in promoting sustainable economic growth is paramount.
"Globally, the top performing countries that have been able to lay the foundations for solid growth are leading the way. Smaller nations, such as South Korea and the UAE, are also moving quickly up the rankings, while developing economies are often making progress faster than their developed counterparts," he added.
Regionally, the UAE is followed by Qatar, Oman, Bahrain, Saudi Arabia and Kuwait.
Globally, Switzerland maintained its place at the top, followed by the Netherlands and Singapore. Elsewhere in the top 10, Luxembourg and Finland have both moved up a single place compared to last year, leapfrogging Norway. This year's ranking has also seen Mauritius, the Bahamas and South Korea make significant ground.
Among other major global economies, GPI ranks the US at 20th, Italy at 39th, China at 52nd, India at 95th, the Philippines at 103rd, Bangladesh at 123rd and Pakistan at 137th.