Consistent leadership in regional capital inflow, contributing $1.67 billion year-to-date
The UAE continues to dominate the Gulf Cooperation Council (GCC) in foreign capital inflows, registering a net influx of $680.4 million in May 2024. This marks a significant recovery from April, when the country experienced a net outflow of $48.6 million amid regional tensions and global economic challenges, including high interest rates.
According to a report by Dubai-based management consultants and financial advisors Iridium, the UAE’s May inflows significantly boosted its year-to-date total to $1.67 billion. Abu Dhabi was the primary driver of this growth, recording net foreign capital inflows of $686 million in May, a sharp turnaround from a net outflow of $19 million in April. Meanwhile, Dubai continued to experience net outflows, maintaining a figure of -$30 million from the previous month.
Year-to-date, Abu Dhabi has secured the top position with $1.344 billion in net inflows, while Dubai holds second place in the region with $323 million. Saudi Arabia follows closely with $224 million in net inflows, demonstrating resilience despite occasional outflows. Kuwait reported net inflows of $190 million, contrasting with Qatar, which saw net outflows of -$125 million.
In May 2024, GCC equity markets saw a positive trend in foreign capital flows, with a net inflow of $616.7 million. The four GCC Emerging Markets—Kuwait, Qatar, Saudi Arabia, and the UAE—combined for a higher net inflow of $636.2 million.
Iridium noted that GCC equity markets have faced significant volatility in foreign capital flows over the past three quarters due to geopolitical instability. After experiencing major inflows in mid-2023, markets saw substantial outflows in the following months, particularly in October 2023, following the Israel-Gaza conflict, and again in April 2024 when ceasefire talks failed.
This sustained foreign capital inflow underscores the UAE’s attractiveness to investors, bolstered by its economic stability and strategic initiatives aimed at enhancing the business environment.
