The Middle East - Challenges and opportunities for global and local asset managers
The Middle East economies have grown strongly in the past few years
The region has bounced back strongly from the crisis in 2008, and nations have increased their efforts to diversify their economies.
Middle East growth has picked up strongly following the financial crisis of 2008-2009, driven to a large extent by growth in the Gulf Cooperation Council countries (GCC)—composed of Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman, and Bahrain. The GCC region’s real GDP growth rate averaged 5.2% from 2010 to 2014, thus outperforming most developed countries throughout the period.
Most GCC countries have benefited from high oil prices over the past decade, which contributed to significant wealth creation, for both institutional and private investors. Oil revenue still represents the majority of the region’s GDP, but the countries are making efforts to diversify their economies. The UAE and other countries in the region have launched development plans (e.g., Abu Dhabi Vision 2030, Qatar National Vision 2030, UAE Vision 2021) to develop other sectors such as aviation, tourism, transportation, and financial services.
Oil revenues have allowed the countries in the region to invest heavily in infrastructure projects that today form a solid base for the development of a more diversified economy. However, the recent fall in oil prices could challenge near-term growth and investments, but long-term perspectives remain favorable in terms of oil and non-oil development.
Inside magazine issue 9, June 2015
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