UAE and Saudi Diversification Drive Growth Amid Challenges

UAE, 12 March, 2024 : The latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics, projects a slowdown in 2024 due to persistent oil production cuts. The GCC growth forecast has been revised down to 2.7%, with non-energy sectors expected to drive growth in Saudi Arabia and the UAE.

GDP growth projections for Saudi Arabia and the UAE have been adjusted to 2.1% and 4.4% respectively, reflecting strong non-oil economies and gradual easing of oil cuts from Q3. Despite disruptions in shipping routes through the Red Sea and Suez Canal pushing up costs, the UAE and Saudi economies remain resilient.

The report notes a cumulative expansion of the energy sector by 1.3%, a turnaround from last year's decline. Non-energy sectors in the GCC are set to benefit from government and private investment, with initiatives like Vision 2030 in Saudi Arabia and 'We the UAE 2031' driving growth.

The tourism sector remains crucial, with Dubai International Airport and Saudi airports seeing increased traffic. GCC inflation is expected to hover around 2.5%, primarily driven by housing costs, easing concerns of rate hikes by the Federal Reserve and GCC central banks.

Overall, despite challenges, the UAE and Saudi Arabia's commitment to diversification and fiscal prudence bode well for their economic resilience and attractiveness to foreign investment.

Source : www.khaleejtimes.com