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The FDI Outlook 2023: Asia Continues To Be At The Heart Of Major Reallocation Of Investment

FDI Intelligence: 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’.


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.

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