Analysis released by IHS Global Insight points to 15 investment hotspots in the Europe, Middle East and Africa (Emea) region that should offer some good news to businesses.

IHS’ economic and country risk team have highlighted the following foreign direct investment (FDI) hotspots, shown in the map below.

In emerging Europe, “the Czech Republic and Slovakia have favourable risk profiles, business-friendly agendas and high-educated populations, making these countries ripe for opportunity”, says Sara Johnson, senior research director for global economics at IHS Global Insight.

“Romania’s low labour costs, privatisation opportunities and natural resources also make up an attractive package for businesses looking to invest.”

IHS forecasts that real GDP growth in emerging Europe is on a steady course for the next 10 years. All five highlighted countries will see their real GDP close to 3% through 2025.

The business environment in Serbia and Turkey is on the up, but is slightly more challenging. “Serbia is a long-term play for businesses as its growth prospects really depend on accession into the European Union in the 2020s,” Johnson says. Turkey is more of a high-risk, high-reward market, she says. “You have a large, young, growing population with low labour costs and access points to Europe and the Middle East, but a security environment that is more risky than what we see in our other highlighted markets.”

In Sub-Saharan Africa, countries remain highly dependent on commodities exports, making their exports and fiscal revenues vulnerable to the current slump in world commodity prices. Nevertheless, IHS economists identified the East African region as a particular growth and investment hotspot, with Ethiopia, Kenya, Tanzania and Uganda all forecast to show rapid economic growth over the next decade.

“Ethiopia is a star on the rise,” says Rajiv Biswas, senior director for economics at IHS Global Insight. “The government has been undertaking strategic policy reforms to build up its industrial sector, led by garments and food processing, and they have accelerated infrastructure development: including hydropower dams, railroad, and ports as well as a 3G roll-out scheduled over the three-year outlook.” Real GDP growth in Ethiopia exceeded 10% a year in the decade to 2015. Strong growth is expected to continue, with GDP growth forecast at 7.6% in 2016.

Kenya has become one of the most attractive destinations in Africa for FDI inflows into a wide range of sectors, including infrastructure, energy, real estate and tourism. The Kenyan economy has grown at a pace of just over 5% a year in the decade to 2015. Tanzania has also shown rapid growth of 7% a year during 2013-2015, with similar growth expected in 2016.

Despite the impact of low oil prices and civil unrest on many countries in the Middle East, IHS believes a number of economies have a favourable long-term growth outlook.

According to Biswas, the lifting of economic sanctions in Iran will boost real GDP growth from 0.9% in 2015 to 3.2% in 2016, and push GDP growth to an average pace of 4.5% over the next decade.

According to the IHS study, the UAE is forecast to grow at 3.5% a year over the next decade, helped by a recovery in Abu Dhabi’s oil exports due to gradually improving oil prices over the medium term, as well as strong growth in Dubai’s economy. “Dubai’s role as a leading global commercial aviation and shipping hub as well as tourism destination has helped to diversify the structure of the UAE economy,” Biswas says.

In North Africa, Tunisia is forecast to grow rapidly, at 4.2% a year over the next decade, while Morocco is also forecast to show strong growth of 3.7% a year between 2016 and 2025.

“EU trade and investment ties with both Tunisia and Morocco are expected to be a key growth driver,” Biswas says. “The EU is negotiating with both Morocco and Tunisia bilaterally for the creation of a Deep and Comprehensive Free Trade Area, which will further boost EU trade and investment flows to both countries. For the EU, helping to build strong, fast growing economies in North Africa is a key strategic priority to help improve geopolitical stability in the region.”