According to a report,the region of GCC is all set for an augmented growth in 2018. This development comes after the turbulent years of low oil prices and the severe measures of the Government. The Global Advisory Firm Oxford Economics released a 2018 forecast where it is predicted that the six members of the GCC will witness a growth of 2.7% as opposed to the mere 0.3% in 2017.
This accelerated growth of GCC is the fastest development in three years, and it is back on the strength of rising oil prices which will help the Government to loosen the grip on the stern measures implemented in the past few years, the report said.
In further findings, the report gave an individual breakdown of individual GCC countries, where the country of Oman will witness a 5% increase when compared to the 0.2% in 2017. The UAE will likely see an increase of 3.3% from the growth of 1.7% in 2017.
The shifting stride is anticipated to be much slower in Bahrain as the growth remains steady at 1.8% which are similar to the levels seen in 2017. Similarly, the Saudi Arabia’s growth will increase by 2% after the warning of 0.3% in 2017. The state of Kuwait is said to grow by 2.4% following the decline of 1.7% in 2017.
Regardless of the positive forecast, the report also highlighted that the factors of potential geopolitical risks in the GCC could undermine its growth in 2018. The reasons attributed to the elements of increased strains between Saudi Arabi and Iran, the ongoing GCC dispute with Qatar, the anti-corruption measures of Saudi Arabia and the resignation of the Government of Kuwait in October.
The report’s conclusions arrived after the announcement of the expectation of the Organization of the Petroleum Exporting Countries who expected that the world oil market would be balanced by late 2018 as they have enforced an agreement with other producers to lessen output and reduce excess oil in storage.
The non-oil part of the UAE is set for a 3% growth this year from the previous growth of 2.7% in 2017. “The recent improvement in oil prices has shed a positive sentiment on the economic activity in the non-oil sector and boosted economic confidence,” the UAE central bank said in its third-quarter review publication.
In the meantime, Dubai has announced a record spending of 56.6 Billion UAE Dirhams($15.6 Billion) for 2018 with the primary focus on infrastructure development for the Emirate’s hosting of the World Expo 2020.
The economy of UAE, which is the second largest economy in the GCC after Saudi Arabia was given an appreciation by the International Monetary Fund officials. They predicted that the UAE is expected to recover steadily in 2018 without any negative impact from the introduction of Value Added Tax of 5% from January 2018.
Natalia Tamirisa, IMF mission chief to the UAE has said that “We see a gradual recovery for the UAE over the next few years on the back of firming oil prices, a pick-up in global trade, investment for Expo 2020 and easing fiscal consolidation.”
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