With earnings from oil accounting for more than 80% of government income, the halving of prices since June has eroded state revenue and could impact the extensive capital works programme in 2015, despite a government pledge to hike this year’s spending by 4.5% from its earlier plans.
Strong fundamentals and a diversified economy are keeping concerns at bay in Dubai, despite a potential cooling of investor sentiment across the region and weakening global conditions.
Despite the turmoil in global energy markets, Saudi Arabia moved towards the end of 2014 with its economy having outperformed many in the region.
The economy of Jordan is picking up strength with forecasts for higher year-on-year growth this year and next, while lower oil prices should provide at least a temporary respite from the kingdom’s energy burden.
House prices in Saudi Arabia are expected to rise further on the back of high demand for homes and a slow rollout of developments, with figures suggesting housing requirements will continue to outstrip supply even as new projects reach completion.
Consumer sentiment in Turkey is weakening as the pace of economic growth slows and consumers tighten their purse strings, potentially slowing the retail sector’s stellar performance in recent years.
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