Easing Interest Rates to Drive Growth in GCC Non-Oil Economies

UAE, 18 September, 2024 : Easing interest rates are set to benefit Middle Eastern economies, particularly those with currencies tied to the US dollar, according to PwC's latest “Middle East Economy Watch.” Lower interest rates should enhance borrowing conditions and stimulate growth in the non-oil sectors.

The report highlights that GCC countries, which are actively diversifying their economies, are likely to lead this growth. Efforts to remove trade barriers will further support regional expansion. 

The US Federal Reserve is anticipated to lower interest rates soon, providing relief amidst rising inflation. The IMF forecasts regional GDP growth at 2.8% for 2024, up from 2% in 2023, and 4.2% in 2025.

The GCC’s non-oil sectors are expected to drive growth, supported by shifting trade patterns and reducing trade barriers. Recent developments, such as the UAE-Australia economic partnership agreement, are expected to eliminate tariffs on over 99% of Australian products, boosting trade and economic performance in the region.

Despite ongoing uncertainties and disruptions, GCC countries are showing strong non-oil sector performance, with fiscal surpluses reported by the UAE, Qatar, and Oman, and Saudi Arabia reducing its deficit.

Source : www.zawya.com