Daily Management Review

Middle East economies are recovering in 2018


07/04/2018


According to forecasts this year, the economies of the Middle East will grow by an average of 2.4%, as they are trying to recover from the difficult 2017, helped by rising oil prices and easing financial consolidation measures.



pixabay
pixabay
Improving security conditions and the progress of economic reforms are also contributing to GDP growth after a 3-year drop in oil prices and tightening of fiscal constraints, which hindered growth across the region, according to a recently released Economic Insight Middle East report.

Regional economies are accelerating growth after a difficult 2017, when GDP growth fell to about 1%, the report said.

"Higher oil prices, which this year rose above $ 80 per barrel, which is the highest since November 2014 and a significant increase since late 2017, when oil prices averaged from $ 54 to $ 55 per barrel, are one of the main factors supporting regional growth," said Mohamed Bardastani, ICAEW economic adviser and senior economist for the Middle East at Oxford Economics.

The increase in public spending will lead to GDP growth, after involuntary tightening of belts to compensate for the reduction in revenues from hydrocarbons. According to him, public spending is expected to increase by an average of 5% in the Gulf countries in 2018. This will mainly happen in the form of export financing, support of small and medium-sized enterprises and housing.

It is expected that in the UAE GDP growth will accelerate to 2.6% in 2018 after a seven-year low of 1.5% in 2017.

The increase in government spending related to the restoration of the regional economy, the government's announcement of a stimulus package of $ 13 billion is one of the factors that will contribute to the growth of the UAE, the region's second largest economy, Bardastani said.

According to the report, the UAE market will continue to have some of the best indicators in the Middle East in 2018 even despite the introduction of a 5% VAT in January, thanks to which inflation will grow to 4% in 2018.

Lebanon and Iraq predict a record 2.5% GDP growth, Kuwait and Jordan - 2.4% respectively, Bahrain 2.3%, Saudi Arabia 1.8%.

According to forecasts this year, the fastest growth in Oman will be 3.6%, although in 2017 this figure was no more than 0.2%, and the country continues to struggle with one of the highest debt-to-GDP ratios in the countries of the Persian Gulf, after Bahrain, added Bardastani.

Forecasts for 2018 state that the average GDP growth in the GCC countries will reach 2.3%, compared with 0.1% in 2017.

The key risk for economic activity this year would be complacency about the rise in oil prices on the part of oil-exporting countries. This can force them to postpone much-needed reforms to diversify their economies. A sharp drop in oil prices, although unlikely because of OPEC's agreement to limit production, is another risk of GDP expansion, Bardastani said.

The growth of interest rates in the US and the increased trade tension between China and the US are more remote causes of potential risk, since they can affect the overall growth of global GDP.

source: reuters.com






Science & Technology

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

China Lifts Approval Freeze On New Video Games Launch

Concentrated Solar Plant System To Dispatch Electricity To The Grid On Demand

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece