GCC Will Outperform Global Economy in 2024

Group’s International Funding Outlook 2024 report recommends buyers diversify asset allocation, factors to alternatives in MENA ESG investing.

The economies of the UAE and Gulf international locations will outpace the worldwide forecast for 2024, helped by the home multi-year funding cycle within the area, in accordance with First Abu Dhabi Financial institution’s 2024 International Funding Outlook (GIO) Report: ‘Making a optimistic influence.’

Regardless of current geopolitical headwinds and muted international restoration, FAB expects nationwide and regional progress to be pushed by the sturdy demand in tourism, actual property, transportation, and manufacturing sectors. FAB sees the UAE’s GDP increasing 3.7% in 2023 and 4% in 2024, and the GCC’s by 3.4% in 2024 — greater than the IMF’s international forecast of three.1% and a couple of.1% for the US in 2024.

The GIO report, written by the financial institution’s business consultants, examines the present international financial and funding atmosphere, offering insights into key macroeconomic traits.

FAB’s outlook notes that the GCC area continues to be supported by robust progress in non-oil GDP, with 3.4% anticipated within the medium time period as international locations within the area proceed to diversify their economies.

In monetary markets, FAB recommends buyers diversify the asset allocation of their portfolios as market and financial volatility seems prone to proceed in 2024 and construct a defensive portfolio to offer flexibility. The report factors out tailwinds resembling greater fiscal spending, speedy disinflation and a decent labour market to this point supporting consumption and spending and lifting international fairness markets however notes a delayed influence of financial coverage choices may quickly take impact till rates of interest and inflation come down.

Michel Longhini, Group Head of FAB International Non-public Banking, mentioned: “Traders might want to stay cautious given the rise and heightened ranges of rates of interest which is able to proceed to influence economies and geopolitical dangers which may enhance volatility. International financial progress is anticipated to decelerate in 2024. Nonetheless, our regional markets look resilient, with financial progress anticipated to choose up, pushed by profitable financial diversification and reforms.

“Within the ESG investing house, MENA markets present some fascinating alternatives together with diversification advantages for international portfolios. This yr’s International Funding Outlook theme — ‘Curiosity Price Peaks and ESG Integration: Shaping the Way forward for International Asset Allocation’ — identifies these funding alternatives and addresses key points that can drive return for buyers. FAB purchasers can profit from the enter and the analysis of the whole workforce of economists and funding professionals whose views have been introduced collectively right here.”

Alongside key financial indicators, the FAB GIO considers a spread of traits shaping future progress prospects, together with a deal with particular industries. The report consists of centered chapters on ESG (environmental, social and governance), oil, MENA markets outlook, rising markets outlook, international markets outlook, actual property, and developments in funding merchandise and options.

The GIO report additionally highlights what FAB believes are the 5 key dangers for 2024: synthetic intelligence, the US elections, tensions within the Center East and Africa, local weather change, and US-China relations.