In a global economy that is more diverse than ever, smart investors and businesspeople alike are always looking for new and expanding markets. While it is impossible to predict with certainty which cities will be the strongest performers, that shouldn’t stop savvy players from surveying the international scene for the most promising prospect. Here are a few good places to start:
1. Abu Dhabi, United Arab Emirates
With an early push by the United Arab Emirates’ leaders to establish Dubai as the go-to financial capital of the Middle East, the Emirates’ actual capital, Abu Dhabi, initially took something of a backseat. That’s starting to change, with the country’s Abu Dhabi Plan showcasing a strategy to strengthen its economy by supporting growth in sectors including energy, real estate, construction, banking, and tourism. The plan has been a success on many fronts, including a rise in foreign direct investment and tourism, and the emirate is expected to further stimulate growth by easing restrictions on foreign ownership.
2. Mumbai, India
Home to around 22 million people, the vibrant coastal city boasts the largest population in India––and that’s no small feat. In addition to a wealth of human capital, India’s economy has also been given a boost since the 2014 election of staunchly pro-business Prime Minister Narendra Modi, who actively rallies for increased foreign investment in India and has drastically increased spending on infrastructure. Mumbai also stands to benefit from an ambitious high-speed bullet train project planning to connect the city with New Delhi, Chennai, and Nagpur.
3. Manila, Philippines
In 2016, the island nation posted the strongest gains in Asia, and its momentum shows every sign of continuing in the near future. With English as an official language and significant historical ties to the United States, Manila is an increasingly popular destination for U.S. companies to outsource jobs––approximately 1.3 million jobs to be exact.
This increase also means that the middle class is quickly expanding, which, in turn, spurs an increase in discretionary spending. The cycle of wealth lifts up others throughout the city. Additionally, the Philippines’ president Rodrigo Duterte has secured funding from China to help finance his ambitious infrastructure program, which includes a railway and a hydroelectric dam.
4. Nairobi, Kenya
Africa is home to some of the world’s fastest-growing cities, and Kenya stands out as a potential winner as foreign interest in the continent continues to grow. The city is a key regional tech and commercial hub, and is often seen as an entry point into the African economy. As evidenced by record-setting housing prices, the city’s real-estate boom is also a testament to the urbanization that is continuing to subsidize the economy’s rapid expansion.
5. Toronto, Canada
With Canada’s economic growth tripling that of the U.S. during 2017 and outperforming all other G7 nations, Toronto stands out as a western hemisphere city to watch. While there’s no one factor that contributed overwhelmingly to its recent economic success, several solid growth indicators have been keeping Canada and its capital city on strong footing. The total value of Canadian exports still reached record highs in May. The manufacturing and retail trade sectors have performed well. Job growth has been strong with the June employment report quadrupling expectations for new employment. Additionally, a combination of talent and new investment has been turning Toronto into a regional tech hub. The combination of these factors lay the groundwork for Toronto to continue its rise.
6. Hamburg, Germany
As Brexit measures take hold and the EU redefines its economic relationship with Great Britain, Germany continues to cement its role as a European financial powerhouse. Germany’s second-largest city, Hamburg, recently hosted world leaders for the G20 conference, where Germany’s leadership and the city’s strengths were clearly on display. The boost in global visibility and standing is good news for Hamburg.
One of the city’s greatest strengths that will contribute to its continued expansion is its diversity. Germany is well-known for its openness to foreigners starting businesses and to foreign workers, and Hamburg has the highest percentage of foreign workers in the country. Together with an already strong economy, these policies will assist Hamburg’s rise.
7. Tokyo, Japan
Recently lowering the corporate tax rate, Japan’s government is determined to push forward business-friendly policies that promote corporate growth. They also expressed their commitment to maintaining interest rates close to zero. That not only encourages corporate spending but also encourages domestic spending amongst its population, since those historically low-interest rates provide little incentive to save.
Additionally, the government’s loose monetary policy means that the yen is relatively cheap compared to foreign currencies. This makes Japanese goods relatively cheaper to foreigners, encouraging exports and helping business growth.
8. Moscow, Russia
Bolstered by a strong performance in the natural resources, transportation, and manufacturing sectors, Russian GDP growth has been notably strong in 2017. Even in spite of lower oil prices, growth climbed to an annualized rate of 3.5% in May and 2.9% in June, according to Reuters. The International Monetary Fund has also expressed its positive outlook on Russia, encouraged by low rates of inflation. If the low inflation rates continue as expected, it will allow the country’s central bank to continue on a path of expansionary monetary policy, which can further help the economy along.
Moscow stands out to benefit in particular due to recently proposed tax benefits for some high-tech companies in the city’s special economic zones. Proposed by Moscow’s mayor, the changes would increase the period of tax exemption for certain companies focusing on technical innovation, encouraging business investment and increasing economic development in the Russian capital.