According to Ernst & Young’s (EY) latest Rapid-Growth Markets (RGM) Forecast report, growth remains robust across the GCC region, with Qatar’s economy predicted to grow by six per cent, followed by Saudi Arabia (4.3 per cent) and the UAE by (4.1 per cent) in 2014.
“Economic growth across the GCC remains robust, with the region re-emerging as an influential global hub for trade between Asia, Europe, Africa and North America; the key challenge for the GCC remains continuing to diversify its economies and investing in its growing non-oil sectors,” says Bassam Hage, Mena Markets Leader at EY.
In Saudi Arabia, GDP is expected to grow by 4.3 per cent in 2014 and 2015, with non-oil growth expected to average 4.7 per cent between 2014 and 2017. While this reflects a slight slowdown from the 2010 to 2012 period, growth remains strong in the non-oil sector and will continue to support Saudi Arabia in diversifying its economy.
The economic outlook in Qatar also remains positive, with growth set to increase by an average of six per cent across 2014 to 2017. Growth in the non-oil sector in particular is predicted to increase in excess of ten per cent this year and a rapidly expanding population continues to boost domestic consumption. This growth has been largely generated by infrastructure funding which is set to drive spending on tourism, hospitality and construction. Major infrastructure projects include the Doha metro and Hamad International Airport.
Economic growth in the UAE is set to increase by an average of 4.3 per cent over the next four years. This will be largely attributed to Dubai’s successful bid to host the World Expo 2020. Confidence remains high in the UAE and EY has upgraded its growth forecast for the country in the medium term. Though the benefits of hosting the event will be concentrated mainly in Dubai, EY predicts ancillary growth in other Emirates as a result. The successful bid is predicted to stimulate growth in the non-oil sector, including increased spending on construction, tourism and hospitality. “Emerging markets remain centre stage both for the potential they offer and the challenges they pose. Businesses and governments are taking a fresh look at opportunities that can shape the future of their markets and people. Businesses seeking to establish, expand or maintain interests in emerging markets, should raise their sights to the longer term and the serious prospect that their global position will be determined by these markets,” says Hage.
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