Israel and Qatar offer two of the most promising opportunities for investors and exporters this year, Atradius research finds.
Atradius’s 2022 Most Promising Markets report identifies five markets set to surprise in the months ahead, including Israel, Qatar, Cote d’Ivoire, Uruguay and Taiwan.
While the global economic recovery from the pandemic is bumpy, the economies of Israel and Qatar are recovering well and their outlooks generally well-insulated from negative pandemic developments thanks to extensive vaccination rollouts and/or low infections rates.
The resumption of economic activity is contributing to brighter prospects in the tourism and hospitality sectors while the acceleration of digital adoption for consumers is keeping up demand for transport and logistics. The global energy transition is also driving policy initiatives in several of these markets, pushing up demand in the renewable energy and electricity sectors, especially for EVs.
Atradius assessed the economic performance, macroeconomic strength and Covid-19 situation of countries worldwide.
Israel: successful vaccination campaign sustains growth prospects
Israel has stood out recently in the pandemic thanks to a highly effective vaccination campaign which has allowed economic activity to continue without serious restrictions. More than 70% of the population has received two shots of the vaccine and it is the first country to start rolling out a fourth dose. This will support economic growth of an expected 5.0% in 2022 following a 6.5% expansion in 2021.
Israel benefits from strong institutions and a stable business environment. These limit the adverse effects of political uncertainty on political continuity. The new government’s reform plan includes structural reforms to boost the labour market and improve the business environment further. Its highly skilled work force and diversified economic base protect the economy from shocks. Israel’s developed economy offers particular opportunities in high-tech goods and services, especially the well-established aerospace sector.
The Israeli transport sector offers bright opportunities, especially in the electric vehicle (EV) segment. Despite being a high-tech country, its adoption to date of EVs has been marginal. But this is changing as the authorities have announced ambitious plans to have all new cars sold by 2030 be electric. This offers opportunities for exporters of EVs and those that specialise in the associated infrastructure like public charging stations.
Qatar: World Cup boosts investment beyond gas sector
Economic prospects in Qatar are strong, supported by moderately low political risk and an ambitious diversification plan. Qatar’s economy is highly dependent on the hydrocarbon sector which is subject to high volatility. Higher oil and gas prices will support economic growth to the tune of 3.6% in 2022.
Qatar is the largest global exporter of liquefied natural gas (LNG), demand for which is expected to remain strong through the global energy transition, as gas is a lower-emission fossil fuel. Output is set to grow substantially with the US$30bn North Field Expansion.
The renewable energy sector is also increasingly important as Qatar has set the goal of attaining 20% of its energy from solar power by 2030 – although this target is not very ambitious compared to regional peers.
Hosting the 2022 FIFA World Cup will help boost opportunities in the non-oil sector. Tourism and hospitality should experience a strong boost, as long as the pandemic remains under control.
Moreover, the authorities have started taking serious steps towards electrification ahead of the World Cup but also to meet long-term goals. The transport sector offers bright prospects as Qatar aims to transition 25% of its public bus fleet to electric this year and install 600 charging stations to support them ahead of the tournament. With the installation of chargers, EV adoption is expected to begin picking up as well.