The Economist Intelligence Unit (EIU) has predicted Singapore, Canada, and Denmark will have the best business environments in the next five years.
The EIU is an organisation that analyses economic and political developments around the world, helping businesses, financial firms, educational institutions, and governments plan for the future.
“According to our Q2 2023 rankings, North America and Western Europe retain their positions as the top regions for business,” EIU said. “Asia follows closely in third place, surpassing Eastern Europe. Meanwhile, Latin America slightly outperforms the Middle East and Africa (MEA) region.”
After Singapore, Canada, and Denmark, several West European countries, the US, Hong Kong, and New Zealand constitute the rest of the top ten economies with high business environment ratings. While Vietnam, Thailand, Belgium, Sweden, India, and Costa Rica recorded significant improvements in their business environments, China, Bahrain, Chile, and Slovakia have seen the largest deterioration.
China’s business environment deteriorated due to policy uncertainty, US-China tensions, and a challenging long-term growth outlook, per the EIU. As a result, China fell behind Malaysia, Thailand, Vietnam, Mexico, and India, which are now attracting manufacturing investment.
In Eastern Europe, the war in Ukraine reduced market opportunities for countries in that region, while Western Europe has fared better.
Further, the economic forecaster reported no countries in the Middle East or Africa (MEA) saw improvements in ranking on the scale of other regions in the world. The MEA economies had the lowest-ranking region, with poor governance, insecurity, weak corporate governance and regulation, poorly trained labour forces, and an over-reliance on hydrocarbons in some countries –especially Nigeria and Angola– as the contributing factors.
“Israel and the Gulf states are the highest-ranked countries in the region, with the latter’s scores improving in recent years in line with rising oil prices and growing absorptive capacity for new investment. Qatar, Saudi Arabia and the UAE will improve further in 2023-27,” according to the EIU report. “South Africa saw a modest rise, but Bahrain and Kuwait fell, mainly due to deteriorating market opportunities scores caused by falling global oil prices and a lack of progress on regulations and reforms.”