Uruguay has been ranked as the best country to invest in globally this year according to US News, in partnership with Wharton School of the University of Pennsylvania and strategic consultancy BAV Group.

The small South American country – with a population of only 3.5 million and GDP of $59.9bn, according to the IMF – has jumped to the top spot in the Best Countries to Invest In rankings from 13th place last year. The IMF estimates Uruguay’s economy grew by only 0.4% this year but forecasts it will expand by 2.3% next year.

Between 2007 and 2017, the country positioned itself as one of the main recipients of foreign direct investment in Latin America with FDI averaging 4.1% of GDP a year, according to Uruguay XXI, the country’s investment promotion agency. 

Saudi Arabia – with 34 million inhabitants and a $779bn economy, according to the IMF – was ranked second this year but did not even feature in the rankings last year. The IMF estimates its economy grew by only 0.16% this year but forecasts 2.18% growth next year. According to the UN’s World Investment Report, FDI flows to Saudi Arabia jumped to $3.2bn in 2018 from $1.4bn in 2017, still significantly lower than the 2008 peak of $39bn.

Costa Rica – with a population of 5 million and GDP of $61bn – was ranked number three and again did not appear in last year’s rankings. IMF estimates that its GDP expanded by 2% this year and expects it to grow by 2.5% next year. Its FDI flows amounted to $2.1bn in 2018 and the US accounts for 50% of its foreign investment, according to Santander.

Ranked fourth this year is Luxembourg (not ranked last year), followed by India (ranked ninth last year); Poland (ranked third in 2018); Qatar (not ranked last year); Vietnam (ranked 23rd last year); Slovenia (ranked 21st in 2018); and Chile in 10th place this year (ranked 20th last year).  

The rankings draw from the results of a global perceptions-based survey, which rates countries based on the highest scores among almost 7000 business decision-makers on a compilation of eight equally-weighted country attributes: corrupt, dynamic, economically stable, entrepreneurial, favourable tax environment, innovative, skilled labour force and technological expertise.