Greece, Argentina and India are the three fastest-improving business environments in EIU’s Business Environment Rankings. Our Vector Autoregression (VAR) model suggests that these improvements may result in an uptick in real GDP per capita growth, investment spending and foreign direct investment (FDI).
Our latest rankings also reveals that Singapore, Denmark and the US are projected to have the best business environments over the next five years, with Singapore expected to maintain its position at the top for the 16th consecutive year. Several West European economies, alongside Canada, Hong Kong and New Zealand, make up the remaining top ten best places in the world to conduct business.
The VAR model measured two decades’ worth of data, successfully predicting which countries and territories were on the verge of notable economic growth, and which were, therefore, favourable destinations to direct future investment spending. Our proprietary business environment index not only includes quantitative forecasts such as growing market opportunities, but also incorporates hard-to-measure indicators with strong predictive power, such as likely upcoming policy changes, demand from key trading partners and changes in the institutional environment.
Greece has witnessed the most significant improvement, showing the country’s pro-business government, which has implemented reforms, cut taxes and initiatives to enhance business confidence.
Additionally, Argentina’s sharp improvement in its index score largely reflects the free-market reforms that the president, Javier Milei, is expected to introduce, such as policies to boost private enterprise and attract foreign investment.
India is the only single-country market that offers a potential scale comparable to that of China. India’s youthful demographic profile promises both strong demand and good labour availability, and EIU expects rapid economic growth between 2024 and 2028, with a surge in foreign direct investment in the manufacturing sector as firms look to diversify their supply chains away from China.
“Knowing in advance where economic growth is about to accelerate can make all the difference between investor success and failure. It is critical to understand how the world is changing, and our business environment index, based on historical conditions and expert analysis, is designed to effectively help global organisations formulate their business strategies for the next five years.
One country we highlight in this report is Thailand, where pro-business policies–including investment incentives and upgraded infrastructure–prompted a recent improvement in our rankings, which prefigured a sharp acceleration in the growth of real GDP per head the following year. This is just one example of how our index is a great leading indicator for investment trends.”
PRIANTHI ROY, COUNTRY FORECAST MANAGER AND EUROPE ANALYST, EIU
EIU’s business environment index measures the attractiveness of the business environment in 82 countries and territories, examining 91 indicators spread across 11 different categories. You can download our report to dive into two decades’ worth of data and explore the correlation between a country’s improvement in the rankings and GDP per head here.
The analysis and forecasts featured in this report can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.