As Geo-politcal risks intensify, what will the impact be on the region?
The economist suggests Gulf Co‑operation Council (GCC) states will shrug off a slowing global economy, aided by a loosening of OPEC+ oil production quotas, relatively strong growth in key Asian markets, and trade and investment diversification strategies.
Iran faces a difficult foreign policy balancing act and a dire economic outlook in 2024; it will engage with the West to ease the weight of sanctions, while at the same time building relations with Gulf Arab states and further strengthening ties with China and Russia.
The Middle East will remain a focal point for new Eurasian transport corridors that offer alternative trade routes and geostrategic alliances for regional heavyweights and major international powers. The Economist team forecast that Middle Eastern economic growth will rise by just under 3% in 2024 following measly estimated growth of 1.8% in 2023.
The region’s largest economy, Saudi Arabia, will phase out unilateral oil production cuts that were imposed in mid‑2023, and investment will continue to flow into non‑energy sectors linked to the kingdom’s diversification drive. Travel and tourism, hospitality and entertainment, light and heavy manufacturing, metals and mining, information and communications technology (ICT) and digital transformation, transport and logistics, alongside the green economy, are all earmarked for substantial further investment in 2024 as Saudi Arabia rides a capital expenditure wave towards fulfilment of its Vision 2030 economic diversification strategy.
Other members of the GCC will shrug off a slowing global economy, aided by a loosening of OPEC+ oil production quotas and relatively strong growth in important Asian markets. The UAE, Qatar and Oman, other major GCC states, will benefit from their own trade and investment diversification strategies. However, a drive to boost the hospitality sector will suffer from the impact of the IsraelHamas war. Growth prospects in Jordan, Syria, Lebanon, Iraq and Yemen will be constrained by insecurity and challenging operating and investment environments. Israel and Palestine will suffer from the devastating effects of the Israel-Hamas war, and Iran will struggle with international sanctions.
The full report can be found via: https://www.eiu.com/n/campaigns/middle-east-outlook-2024/
At Mingzulu, we operate with established Financial Services (FS) sector leaders, government officials and entrepreneurs across both FS and adjacent sectors like energy, sustainability, technology & real estate. All of these community members, even amongst the above threats to stability and peace remain hugely optimistic about the region and its high growth potential. Long term stability can however only be achieved if the region can find peaceful solutions to the above challenges as we progress into 2024. We remain committed to supporting this objective in all that we do in our engagements across the region.
