GCC Will Outperform Global Economy in 2024

Group’s World Funding Outlook 2024 report recommends traders 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 line with First Abu Dhabi Financial institution’s 2024 World Funding Outlook (GIO) Report: ‘Making a constructive impression.’

Regardless of latest geopolitical headwinds and muted world restoration, FAB expects nationwide and regional development to be pushed by the strong 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 — increased than the IMF’s world forecast of three.1% and a couple of.1% for america in 2024.

The GIO report, written by the financial institution’s business consultants, examines the present world financial and funding setting, offering insights into key macroeconomic tendencies.

FAB’s outlook notes that the GCC area continues to be supported by sturdy development 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 traders diversify the asset allocation of their portfolios as market and financial volatility seems more likely to proceed in 2024 and construct a defensive portfolio to offer flexibility. The report factors out tailwinds reminiscent of increased fiscal spending, fast disinflation and a decent labour market thus far supporting consumption and spending and lifting world fairness markets however notes a delayed impression of financial coverage selections might quickly take impact till rates of interest and inflation come down.

Michel Longhini, Group Head of FAB World Personal Banking, stated: “Buyers might want to stay cautious given the rise and heightened ranges of rates of interest which can proceed to impression economies and geopolitical dangers which might enhance volatility. World financial development is anticipated to decelerate in 2024. Nevertheless, our regional markets look resilient, with financial development anticipated to select up, pushed by profitable financial diversification and reforms.

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

Alongside key financial indicators, the FAB GIO considers a spread of tendencies shaping future development prospects, together with a give attention to particular industries. The report contains targeted chapters on ESG (environmental, social and governance), oil, MENA markets outlook, rising markets outlook, world 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.