Al Habtoor bullish about 2019
Positive growth to extend into next year and beyond according to chairman of Al Habtoor Group
Khalaf Ahmad Al Habtoor, founding chairman of Al Habtoor Group, has painted a positive picture of the world’s economy for 2019, despite concerns from the International Monetary Fund (IMF).
The Washington-based fund revealed this week that financial conditions have tightened, particularly in emerging markets, while trade tensions have increased - particularly between the US and China.
This, along with rising interest rates, have caused global stocks to slump and threaten to undermine growth.
However, Al Habtoor believes there is plenty to be positive about as the world heads towards the end of 2018.
“Despite news headlines showing the world in turbulence, 2018 was the start of the recovery, which will continue climbing thru 2019, and 2020 onwards,” he said. Adding that, “scare tactics and drama are more appealing on television, but figures give a more positive and realistic outlook”.
“We have been operating in the market for more than 48 years, we invest successfully in the Middle East, Europe and USA. As investors, we look for signs, and they are there.”
Despite global concerns, GCC governments are expected to benefit from a combination of higher oil prices and elevated oil production levels, contributing positively to oil sector growth, fiscal and external balances.
Overall, the Middle East’s GDP is expected to grow to 2.3 per cent in 2018, though growth remains below the 2010-2016 average of 3.9 per cent, the accountancy and finance body ICAEW said in its “Economic Insight’ report.
Al Habtoor expressed his confidence in the economic situation, saying: “Prior to 2008, business was easier, and everyone’s trust was shaken. But the world has recovered stronger than ever, and we are seeing steady positive growth, which will extend to 2019, 2020 and beyond. The GCC provides a safe and welcoming environment for investments, healthcare and education being some of the more promising sectors in the UAE in particular.
“Trillions of US Dollar investments were recently announced at and around the Saudi Investment Conference which took place last month. Those will create massive economic growth in Saudi Arabia, its neighbouring countries and the world. Millions of news jobs will be created. That is in addition to Neom, the new Red Sea Project in Saudi Arabia, the massive developments taking place in the UAE ahead of Expo 2020, and across the GCC and Egypt.
“All of these projects will create an economic boost and massive opportunities for years to come. The multiplier effect will result in a gain 20 to 30 times of the initial investment.”
US President Donald Trump Chinese President Xi Jinping are due to meet on Saturday on the sidelines of the G-20 summit.
Al Habtoor said: “I have always believed that the United States’ economy reflects on all the world. This time it is a positive light. Based on a Bloomberg Businessweek report, the world’s largest economy’s annualized growth rates in the two middle quarters of 2018 were 4.2 per cent and 3.5 per cent. In October alone, the economy generated 250,000 jobs.
“Bloomberg Economics is projecting GDP growth of 6.4 per cent in China’s outlook for 2019. In addition, growth in Japan has been strong in recent years, despite a lack of labour force growth. GDP grew at an annual rate of 3 per cent in the second quarter. Moody's forecasted the Indian economy to grow around 7.5% in 2018 and 2019. This covers four of the world’s largest economies with more than half of the world’s population. And according to the IMF, the global economy is following suit, being ‘on track to grow a healthy 3.7 per cent in 2018 and forecasting 3.7 per cent again in 2019’.”
Al Habtoor concluded: “For the past five decades at least, we have witnessed ups and downs globally. This a cycle, the downtime has passed, it is now time to start on the upward trajectory. And as a diversified group, we are moving forward confidently, with new projects in the pipeline which will be announced soon.”