East Europe & Central Asia rise in GFCI ratings
The 13th edition of the Global Financial Centres Index (GFCI 30) provides evaluations of future competitiveness and rankings for 116 financial centres around the world. The GFCI is compiled using 146 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations.
China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London collaborate in producing the GFCI, which is updated and published every March and September, and receives considerable attention from the global financial community. The GFCI serves as a valuable reference for policy and investment decision-makers.
GFCI 30 rates 116 financial centres across the world combining assessments from financial professionals with quantitative data which form instrumental factors. GFCI 30 has used 77,391 financial centre assessments, collected from 12,862 financial services professionals, who responded to the GFCI online questionnaire.
NEW YORK’S HAT TRICK
New York held on to the top position in the index and has now been in 1st place for 3 years. London remained in 2nd place, while Hong Kong and Singapore in 3rd and 4th position both fell 25 points in the ratings. San Francisco, Los Angeles, and Paris entered the top 10 in GFCI 30, with falls in the ratings and rankings for other leading Asian centres. Nine of the top 10 centres in the index fell in the ratings.
The relatively strong performance of New York and London suggest that the financial services sectors in these cities managed to sustain their performance despite radical changes in working practices during the last 18 months. North American centres performed well in GFCI 30. This is likely to reflect renewed optimism about the US and Canadian economies as they move forward from the pandemic.
EXCEPTION: MUMBAI, GIFT CITY
The majority of the Asia/Pacific centres in the index fell in the rankings in GFCI 30. The exceptions were Hong Kong, Singapore, Seoul, Busan, Wellington, Qingdao, Mumbai, New Delhi, Bangkok, GIFT City-Gujarat, and Jakarta.
Each of the Asia/Pacific centres in the top 10 in the GFCI dropped 25 points or more in the ratings. Assessments from people based in Asia/Pacific suggest that they judge Chinese centres in particular less favourably than before. This might suggest that the economic gains in the region arising from covid may be levelling off.
STRONG RECOVERY FORECAST
Moscow, Warsaw and Istanbul lead in the Eastern Europe & Central Asia region, which also performed strongly. 12 of the 16 centres in the region rose in the GFCI rankings and 9 centres improved their rating. Many economies in the region are forecast to recover strongly following the shock of 2020.
Dubai and Abu Dhabi take 1st and 2nd places in the Middle East & Africa region, both improving in the ranking slightly. Casablanca continues to be the leading African centre, while Cape Town, Johannesburg, and Nairobi increased their ratings by more than 20 points.
Mexico City, Rio de Janeiro, and Sao Paulo were the only centres in the Latin America & Caribbean region to improve their ranking and ratings. Other centres, including the Caribbean Islands, fell sharply in the ratings, reflecting the economic shock experienced in the region as a result of the covid pandemic.
AVERAGE RATING FELL
Overall, the average rating fell 12.9 points (2.05%). While a small change, this is the third consecutive fall in the average rating. The fact that overall ratings continue to fall against the levels that were seen in 2019 reflects the continuing uncertainty around international trade, the impact of the covid pandemic, and geopolitical and local unrest. Kigali and Lagos join the index for the first time, recognizing the growth of financial services in Africa.
FINTECH: WEST EUROPE GAINS
109 centres have been rated on their fintech offering. Fintech ratings were generally lower than in previous editions of the index. New York and Shanghai retained 1st and 2nd positions in the GFCI 30 FinTech ranking, with London rising two places to 3rd place. In the top 40 positions, Western European centres performed well, with most gaining rank position.
Two patterns are seen in the results for GFCI 30 – confidence in the recovery of the North American and Western European economies following the shock of 2020; and a levelling off following the rapid rise of Asia/Pacific centres and their economic stability in the covid pandemic. Competition remains tight. Outside the top 2 centres, only 5 points on 1000-point scale separate the centres ranked 3rd to 8th.