While the global economy is facing a challenging outlook, geopolitical fragmentation and soaring protectionism are creating regional breakaways from this main narrative. 

Thanks to rising commodity prices in some areas, and a strong reform cycle in others, countries from the Middle East and North Africa (MENA) — as well as Asia’s rising economic powerhouse, India — are expected to carry the strongest economic and investment momentum into the new year, according to fDi’s ‘FDI Standouts Watchlist 2023’.


Even a handful of sub-Saharan countries are expected to perform well in 2023, despite facing major energy and food security risks. 

“Investors must remember that Africa is not a country,” writes Hannah Wanjie Ryder, CEO of consultancy Development Reimagined. 

Investors must remember that Africa is not a country.

Hannah Wanjie Ryder, CEO, Development Reimagined

Even the IMF’s overarchingly negative outlook on what it terms sub-Saharan Africa “buries” their own forecast that four sub-Saharan African countries — Senegal, Democratic Republic of Congo, Rwanda and Niger — will be among the 10 fastest-growing globally in 2023, and on average, their growth will out-pace pre-Covid levels, she notes. “Investors would do well to consider African markets next year, even if they've never heard of them before.”

The IMF expects the Middle East and Central Asia region to grow by 3.6% in 2023, sub-Saharan Africa by 3.7%. 


Asia will continue to be at the heart of a major reallocation of capital investment. 

“Investors will continue to diversify their investments away from China to avoid potential supply chain disruptions caused by a lack of employees and supplies, and government-ordered lockdowns,” writes Lawrence Yeo, CEO of consultancy AsiaBIZ Strategy. 

Investors will continue to diversify their investments away from China.

Lawrence Yeo, CEO, AsiaBIZ Strategy

Foreign direct investment (FDI) into China has plummeted since the beginning of the Covid-19 pandemic in early 2020, according to fDi Markets figures. The flipside to China’s falling levels of investment is India’s record FDI in 2022. Strong investment inflows and a solid macroeconomic cycle have propelled India to the top positions of the FDI Standouts Watchlist 2023, where it stands out in second place behind Qatar. 

“Opportunities remain for Asian countries that offer growth drivers such as a good digital infrastructure and ecosystem, and open market access. It is also important for countries to have strong laws protecting intellectual property, easier credit access and a big pool of consumers who are quick adopters of tech and foreign goods.”

The IMF expects emerging and developing Asia to grow by 4.9% in 2023. 

As for the Americas, 2022 has been a record year for mega projects in the US as president Joe Biden’s administration put very generous incentive packages on the table for investors in strategic sectors such electric mobility and semiconductors. 

“It’s hard to imagine announcements will continue at the same frenetic pace of 2022. The coming year will be the one where many of the suppliers for these operations will announce a new home,” writes Didi Caldwell, president of site selection consultancy Global Location Strategies. 

The coming year will be the one where many of the suppliers for these operations will announce a new home

Didi Caldwell, president, Global Location Strategies

“One important unknown is whether there will be a workforce to man the projects that are being considered. The number of open jobs remains consistently high, with more than 10 million in the US alone. Many factories are operating at less than capacity due to labour shortages. The US must fix its immigration problem if it is to fully realise the benefits of the planned investments. With political gridlock in Washington, that isn’t likely to happen in 2023.”

The IMF expects the US to grow by 1% in 2023, and the Latin America and the Caribbean region by 1.7%. 

Last, but not least: Europe. The continent continues to face momentous challenges stemming from the Ukraine war, the related energy crisis and post-Brexit adjustments. 

“With the combination of rapidly rising costs and dwindling demand (the citizens of Europe are already finding it difficult to pay for essentials), the profitability of companies is, at best, set to be squeezed,” writes Martin Kaspar, an FDI expert and head of business development at a German Mittelstand automotive company. 

“In the worst case, this will result in operating losses. Either way, after more than two years of Covid-19, the balance sheets of many companies do not offer much in the way of reserves to ride out hard times.

“It is therefore likely that declining FDI figures will continue their downward path, dramatically decreasing greenfield figures presumably being slightly counter-balanced by merger and acquisition deals of cash-rich companies picking up assets in distress.

“European governments (with the exception of German chancellor Olaf Scholz) will start to think long and hard about whether it is a good idea to have one’s infrastructure and technological crown jewels being picked up for peanuts by foreign corporate raiders.”

New industries are emerging, generating jobs and value.

Martin Kaspar, an FDI expert

But it is not all doom and gloom, he adds: “New industries are emerging, generating jobs and value. E-mobility is on a meteoric trajectory, and European suppliers are playing a key role in this market. Hydrogen and the wider field of renewable energy generation are also entering their growth phase. These are sectors in which Europe is certainly able to compete on a global scale.”

The IMF expects the eurozone and the UK to grow by, respectively, 0.5% and 0.3% in 2023.