GCC economies to see modest growth in 2017
Public sector spending cuts, tightening liquidity, and investor uncertainty were to blame for declines in growth last year, but that most GCC economies will see a slight recovery in 2017
The majority of the GCC countries are expecting modest economic growth in 2017, despite recording sharp declines in activity in the last year, according to analysts.
The global and regional economic outlook and sector analysis of Coface says that public sector spending cuts, tightening liquidity, and investor uncertainty were to blame for declines in growth last year, but that most GCC economies will see a slight recovery in 2017, Gulf News reported.
The UAE, which is the more diversified economy compared to its neighbours, will see the most significant growth of 2.6%, up from 2.3% in 2016, Coface reports.
Massimo Falcioni, CEO of Middle East Countries at Coface, said: “The stable political and security climate of the UAE helps it stand out in the region.
“The country’s business climate, already the most favourable in this region, is improving further. The expected passing of the new UAE insolvency law will make the country still more business-friendly, giving companies in difficulty a reliable mechanism to restructure their operations.”
Falcioni explained that though Abu Dhabi’s economy will continue to face a slowdown due to its largely oil-based economy, the UAE’s growth overall will be driven by the tourism and financial sectors, though difficulty in the construction sector will remain.
Saudi Arabia’s economic growth is expected to grow 1.8% in 2017 from 1.3% last year while Qatar’s economic growth is forecast to be 3.3% in 2017 up from 2.6% in 2016. Qatar’s huge financial reserves and strong revenues from its gas sector will ensure continued public sector spending ahead of the FIFA 2022 World Cup.
Bahrain and Oman are the only two countries inh the GCC with declines in growth this year, with Bahrain’s economic growth declining to 1.7% in 2017 from 2% in 2016. Oman is expected to see a dip of 1.7% in 2017 from 1.8% in 2016.
Kuwait, which has seen consistent growth over the last three years, will continue the trend with an increase of 2.6%, up from 2.4% last year.