The GCC region is anticipated to experience a moderate economic rebound in 2024, with growth projected at around three percent, according to senior analyst Samy Chaar.
Factors Driving Growth
Chaar, Chief Economist at Lombard Odier. Attributes the expected growth to a gradual reversal of oil output cuts in some GCC economies. Coupled with potential rate cuts. Despite global economic slowdown, the region is expected to shrug off these challenges and maintain steady growth.
Oil Market Economic Dynamics
Amid heightened geopolitical tensions and fluctuating global demand. Lombard Odier forecasts Brent crude to trade within a range of $80-90 per barrel in 2024. However, there are potential downside risks in the coming months. With the market stabilizing towards the middle of the range by mid-year.
Monetary Policy and Inflation
Inflation rates in the region are predicted to decrease following recent interest rate hikes. Chaar suggests that monetary authorities may intervene in the money market to mitigate occasional liquidity squeezes. In the UAE. Adjustments to real estate regulations are anticipated instead of monetary policy changes to mitigate the negative impact of rising rates on property prices in Dubai.
Economic Diversification Efforts
Lombard Odier emphasizes the importance of diversifying away from hydrocarbon production for the region’s economic resilience. National visions are expected to drive coordinated investments into non-oil and gas sectors. In Saudi Arabia, investments in tourism and entertainment sectors are projected to accelerate further in 2024. Meanwhile, the UAE is anticipated to lead the region in solar energy investment, supported by continued public sector investments.
Conclusion
The GCC region is poised for economic growth in 2024, buoyed by strategic measures such as oil output adjustments, potential rate cuts, and diversification efforts. Despite global Business challenges, the region remains resilient, with coordinated investments and policy adjustments driving sustainable economic development.
