Mohummed Dawood Talha Farooqui’s Post

The Middle East economy continues to be resilient despite roadblocks caused by oil cuts and geopolitical tensions. According to PwC Middle East’s latest Economy Watch report, the non-oil sector growth is projected to stay robust, influenced by a strong non-oil GDP performance in 2023 and purchasing manager indices in Saudi Arabia and UAE.

In this issue, we share our view on the oil production cuts in the GCC, which is expected to impact the GDP of the oil sector of the hardest-hit countries, such as Kuwait, Oman and Saudi Arabia. However, non-oil sector growth is expected to remain robust, backed by continuous focus on diversification and development that are driven by public and private sector investment and other reforms. We also discuss alternative trade routes that are emerging in light of ongoing trade disruption in the Red Sea, and the growing momentum in green financing in the region. https://lnkd.in/d2VEtJRp

Uncertainty around oil demand growth and supply route disruptions continue to be challenges for the region. On the flip side, there is laser sharp focus on sustainability in the GCC, inflation is beginning to show signs of cooling down, and we have robust non-oil sector growth in Saudi Arabia and the UAE, despite the decrease in oil production. All in all, the regional economy remains robust, despite oil cuts and geopolitical turbulence. Read our Middle East Economy Watch for more details and insights. https://lnkd.in/dxgBScDa

Non-oil growth remains robust despite looming uncertainties, highlights latest PwC Middle East Economy Watch report Non-oil growth outturn so far for 2024 is encouraging with 4% in UAE, 3.7% in KSA, 3.8% in Oman and Kuwait returning to growth at 4.7% * Outlook for further non-oil growth remains positive for 2025 as US interest rates fall enabling GCC states to also lower rates * OPEC+ agrees to extend cooperation and push back planned tapering amid softer demand forecasts as oil falls towards the $70 mark increasing fiscal uncertainty * Funding support from the UAE and third parties including IMF, World Bank and the European Union, has enabled a strong recovery in Egypt. * GCC well positioned to capitalise on the AI revolution amid local innovation and international investment

Economic growth in the GCC region is forecast to accelerate to 4.2 percent in 2025-26, driven largely by the non-oil sector

Economic growth in the GCC region is forecast to accelerate to 4.2 percent in 2025-26, driven largely by the non-oil sector

Economic growth in the GCC region is forecast to accelerate to 4.2 percent in 2025-26, driven largely by the non-oil sector

Economic growth in the GCC region is forecast to accelerate to 4.2 percent in 2025-26, driven largely by the non-oil sector

continue Impact on Saudi Arabia: Oil Revenues: Saudi Arabia's economy is heavily dependent on oil revenues, which comprise around 50% of its GDP and over 70% of government revenues. In a lower-demand environment, Saudi Arabia will need to rely on OPEC+ production cuts to stabilize prices and maintain revenue flows. Vision 2030: The kingdom’s ambitious Vision 2030 plan could face delays due to rising borrowing costs. However, Saudi Arabia has ample reserves and a low debt-to-GDP ratio (30%), which may provide some cushion to continue strategic investments. Foreign Investment: Saudi Arabia has positioned itself as a hub for foreign investment in non-oil sectors like tourism, entertainment, and technology. However, global investors may become more risk-averse in a slowing economy, potentially reducing inflows. Conclusion: Navigating the Next Economic Crisis The global economy is facing headwinds that could lead to another significant downturn. For the oil and gas industry, this means price volatility, constrained investment, and the need to navigate geopolitical challenges. Saudi Arabia, as a key player in the global energy market, will be instrumental in managing the balance of supply and demand. While the near future may bring economic challenges, Saudi Arabia's Vision 2030 provides a roadmap for long-term diversification and resilience. By balancing oil production with investments in renewable energy, technology, and infrastructure, the kingdom can mitigate the risks posed by the upcoming economic crisis and emerge stronger in the years ahead.

Our latest Rubix Country Report on Saudi Arabia has been featured in BW Businessworld ! This report provides an in-depth analysis of the Kingdom's evolving economic landscape and highlights key developments that could reshape the future of the Middle East as a whole. As India’s 5th largest trade partner, Saudi Arabia plays a crucial role in the global energy market, and its strategic ties with India are pivotal, especially given the Kingdom’s significance in oil trade. Key insights include: • India's Exports to Saudi Arabia: $11.6 billion in FY24 • Major Exports: Rice, vehicles, petroleum products, tiles • India's Imports from Saudi Arabia: $31.8 billion in FY24, with petroleum oils accounting for 69% of total imports Dive deeper into these insights and more in the full report, now available on our website! 🔗 https://bit.ly/4cqqS4D News report: https://bit.ly/3T1fB3D . . . . #RubixCountryInsights #Insights #Economic #Diversification #Trade #Strategic #Opportunities #RiskManagement #Partnership #Growth #SaudiArabia