TAG: The Middle East
The results of our most recent OBG Business Barometer: UAE CEO Survey arrive amid a flurry of global economic headlines. On July 23 the IMF announced a downward revision of global growth forecasts to 3.2%, citing the ongoing uncertainty stemming from escalating tariffs and tensions as the main drags on future growth. Meanwhile, on July 25 Mario Draghi, the president of the European Central Bank, suggested that a rate cut and a fresh round of quantitative easing measures to stimulate eurozone growth were on the horizon. Talk of an interest rate cut reflects moves in the US, where the Federal Reserve announced an interest rate cut of 25 basis points at its most recent meeting in late July.
The IMF, which forecasts GDP growth will reach 3.3% in 2020, has noted that green shoots are beginning to emerge in the UAE, nourished by domestic credit growth and low unemployment figures. This is a sentiment that chimes with OBG’s assessment of the local market. The results of the latest Business Barometer: UAE CEO Survey reveal a generally upbeat and optimistic private sector, with 64% of respondents either positive or very positive about the country’s business environment over the next 12 months.
Bahrain’s economy witnessed a slowdown in 2018, with growth falling to 1.8%, compared to 3.8% the previous year. The main drag on economic growth was a slowing oil sector, which contracted by 1.3%. Notwithstanding, Bahrain’s economy represents one of the most diversified in the region, as its oil sector’s contribution as a share of GDP has fallen rapidly since the turn of the millennium, from 43.6% in 2000 to 17.8% in 2018. Over the same period the financial services sector has grown, with its share of GDP expanding from 13.6% to 16.5%, while manufacturing’s share rose from 12.4% to 14.5%.