The latest Business Environment Index by the Economist Intelligence Unit, the research and analysis division of The Economist Group that includes the London-based The Economist newspaper, has combined data from nearly 100 indicators to create a global overview of the top global business hubs to invest in over the next five years.
According to the statisticians at the EIU, “There is a statistically significant positive correlation between changes in our Business Environment Index score and growth in real GDP per head, which strips out population changes, with the change in the economy becoming visible one year after the change in the index.”
Essentially, the scores of the index should provide companies and investors with strong hints at the future of a nation’s economy, whether positive or negative.
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“Knowing in advance where economic growth is about to accelerate can be the difference between investor success and failure,” continues the report. “Our index is designed to reflect the main criteria used by companies to formulate their global business strategies and is based not only on historical conditions but also on our experts’ assessments for the next five years.”
The Top 10
The current Top 10 places in which to do business around the world, according to the study, are: Singapore, Denmark, the US, Germany, Switzerland, Canada, Sweden, New Zealand, Hong Kong and Finland.
According to the report, “These are all advanced economies and long-standing strong performers in our index, so tend to be safe bets for investments. However, both headline and per capita GDP growth rates are likely to be fairly stable and slow.”
Best placed for acceleration
The EIU report goes on to identify the nations that are “best placed for an acceleration in GDP per capita and investment growth”.
Among them are Greece, Argentina, India, Angola. Qatar, Kenya, the Dominican Republic, Venezuela, Lithuania and Serbia.
Greece and Qatar, for example, are noted for their advancements in financing policy, while Argentina and India are earmarked for their changes to their Foreign Direct Investment policies. Angola and Venezuela’s main areas of improvement are market opportunities, Kenya receives recognition for its development of infrastructure, the improving political environment in the Dominican Republic has helped the Caribbean nation earn its spot in the rankings, and the respective tax regime and macroeconomic environment in Lithuania and Serbia are listed as their main areas of progress.
It is important to note that these 10 countries are those most likely to see their biggest improvements in score in the EIU’s index rather than the fastest real GDP growth.
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