Khaleej Times, Mon, Feb 26, 2024 | Shaban 16, 1445
GCC set to outperform global economy in 2024
Emirates:
The economies of the UAE and Gulf countries will outpace the global forecast for
2024, helped by the domestic multi-year investment cycle in the region, a report
showed.
According to First Abu Dhabi Bank’s 2024 Global Investment Outlook (GIO) Report:
‘Making a positive impact.’ the UAE’s GDP is expected to expand by four per cent
this year.
Despite recent geopolitical headwinds and muted global recovery, FAB expects
national and regional growth to be driven by the robust demand in tourism, real
estate, transportation, and manufacturing sectors. FAB sees the GCC’s by 3.4 per
cent in 2024 — higher than the IMF’s global forecast of 3.1 per cent and 2.1 per
cent for the United States in 2024.
The GIO report, written by the bank’s industry experts, examines the current
global economic and investment environment, providing insights into key
macroeconomic trends.
FAB’s outlook notes that the GCC region continues to be supported by strong
growth in non-oil GDP, with 3.4 per cent expected in the medium term as
countries in the region continue to diversify their economies.
In financial markets, FAB recommends investors diversify the asset allocation in
their portfolios as market and economic volatility looks likely to continue in
2024 and build a defensive portfolio to provide flexibility. The report points
out tailwinds such as higher fiscal spending, rapid disinflation and a tight
labour market so far supporting consumption and spending and lifting global
equity markets but notes a delayed impact of monetary policy decisions could
soon take effect until interest rates and inflation come down.
Alongside key economic indicators, the FAB GIO considers a range of trends
shaping future growth prospects, including a focus on specific industries.
The GIO report also highlights what FAB believes are the five key risks for
2024: artificial intelligence, the US elections, tensions in the Middle East and
Africa, climate change, and US-China relations.
Michel Longhini, group head of FAB global private banking, said: “Investors will
need to remain cautious given the rise and heightened levels of interest rates
which will continue to impact economies and geopolitical risks which could
increase volatility. Global economic growth is expected to slow down in 2024.
However, our regional markets look resilient, with economic growth expected to
pick up, driven by successful economic diversification and reforms.
“In the ESG investing space, Mena markets provide some interesting opportunities
along with diversification benefits for global portfolios. This year’s Global
Investment Outlook theme — ‘Interest Rate Peaks and ESG Integration: Shaping the
Future of Global Asset Allocation’ — identifies these investment opportunities
and addresses key issues that will drive return for investors. FAB clients can
benefit from the input and the research of the entire team of economists and
investment professionals whose views have been brought together here.”