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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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    IMF expects non-oil sector growth in Gulf to continue

    Rocky
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    IMF expects non-oil sector growth in Gulf to continue Empty IMF expects non-oil sector growth in Gulf to continue

    Post by Rocky Thu 31 Oct 2024, 4:45 am

    IMF expects non-oil sector growth in Gulf to continue

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    Economy News - Follow-up
    [rtl]The International Monetary Fund expects that the non-oil sector in the Gulf countries will continue the growth path it has achieved in recent years during the current and next two years, while the Director of the Middle East and Central Asia Department at the Fund, Jihad Azour, considered that this sector will be the engine of growth in these countries.[/rtl]
    [rtl]In an interview with Asharq Al-Awsat on the sidelines of the announcement of the Regional Economic Outlook Report for the Middle East and Central Asia, Azour pointed out that the sector has witnessed “continuity” over the past years, despite the fluctuations in oil prices, considering that this is a result of economic diversification strategies whose pace was “acceptable or relatively high, when compared to the global growth rate.”[/rtl]
    [rtl]The fund estimated that non-oil sector growth in the Gulf countries would reach 3.7% this year, accelerating to 4% next year, the same estimates it made in its World Economic Outlook report issued earlier this month.[/rtl]
    [rtl]Azour believed that the continued growth in the non-oil sector in the Gulf countries is due to major factors, namely the policies and reforms adopted by these countries, which contributed to raising the level of productivity, in addition to their investment in promising sectors, in addition to "the rapid ability to emerge from the Corona crisis, and this distinguished the Gulf countries from the rest of the world."[/rtl]
    [rtl]IMF expects Saudi economic growth to accelerate in 2025 - Asharq[/rtl]
    [rtl]As for the future, Azour pointed out that the economic diversification process focuses on four axes: the first is focusing on promising sectors such as artificial intelligence and climate; the second is adding new sectors to the economy, citing the entertainment sector in Saudi Arabia as an example; the third is investing in “human infrastructure,” which he considered “contributed very significantly to the Saudi economy,” such as reducing unemployment levels and increasing women’s participation; and finally, increasing “the process of diversifying countries’ incomes, which allows the Gulf countries to be less in need of oil revenues.”[/rtl]

    [rtl]Gulf countries' economic growth[/rtl]

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    [rtl]The Fund estimated that growth in the Gulf countries would reach 1.8% during the current year, and would accelerate next year to 4.2%. It expects inflation rates to reach 1.8% during the current year, and 1.9% during the next year.[/rtl]
    [rtl]Oil prices have been volatile this year, impacting the economies of producing countries. For example, the Iranian missile attack on Oct. 1 restored the war premium on oil, sending the West Texas Intermediate benchmark above $75 a barrel earlier this month. Still, prices are down about $20 from the first session after the Oct. 7 attack that sparked the conflict last year.[/rtl]
    [rtl]In this context, Azour pointed out that the change in oil prices affects the economies of oil-producing countries, and “the volume of exports is added to the equation,” considering that “the non-oil sector in producing countries is affected by the quantity of production,” thus “prices are part of the equation, and the quantity of production is another part, especially after the extension of the OPEC+ agreement.”[/rtl]
    [rtl]Last September, Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman agreed to extend their additional voluntary oil production cuts of 2.2 million barrels per day for two months until the end of November 2024.[/rtl]
    [rtl]All eyes are now on OPEC+'s plans to gradually restore production starting in December, with traders divided over whether the alliance will go ahead with its plan. Reuters quoted unidentified sources as saying that OPEC+ may postpone plans to restore oil production in December, while the alliance has not issued any statement or position.[/rtl]
    [rtl]Azour pointed out that continuing to implement the OPEC+ agreement would support price stability, but reduce the ability to export and produce, which has "an impact on the oil GDP, the balance of payments or external accounts, and reserve ratios."[/rtl]
    [rtl]He added that what should be considered in oil countries is the size of the non-oil sector and the way it grows, and "here we see sustainable growth of about 3.5 to 4.5% over the past years," expecting this growth to continue. [/rtl]
    [/size]

    [rtl]Government spending[/rtl]

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    [rtl]Volatility in oil prices will mainly affect government spending in the Gulf countries, which could cast a shadow over the growth of the non-oil sector. [/rtl]
    [rtl]In this context, Azour saw that government spending was and still is essential in building a superior digital infrastructure in the Gulf, and it is one of the elements of competitiveness that all economic sectors benefit from today. It also contributed during the Corona period to keeping the economic movement going, which distinguished these economies and maintained growth levels, calling for "continuing these investments that create differential advantages and a fundamental technological superiority for the future."[/rtl]
    [rtl]He also saw that private investments also play an important role, considering that they are not only for financial purposes, but also for “technological purposes and knowledge transfer”, given the latter’s role in building competitiveness in the future. [/rtl]
    [rtl]Azour considered that the region is moving from "regional competition to global competition," which requires "empowering human and capital capabilities, and openness, which we also see through participation with economic blocs," encouraging the Gulf countries to "increase economic integration."[/rtl]
    [rtl]Azour did not neglect to talk about BRICS and the accession of countries from the region to it, as he pointed out that “our region is strategic in terms of geography, resources and connectivity,” and therefore, “everything that can be done to expand the region’s ability to participate in large blocs in a world witnessing economic and political tensions and divisions is beneficial.”[/rtl]
    [rtl]He stressed that the location of the countries of the region allows them to play the role of "a point of attraction in light of a period of global tension, which would be a tributary to growth not only for the Gulf countries, but for the Arab economies as well."[/rtl]
    [/size]

    [rtl]Middle East and North Africa[/rtl]

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    [rtl]As for the Middle East and North Africa, the Fund expected growth to reach 2.1% this year, accelerating to 4% next year.[/rtl]
    [rtl]It is noteworthy that the Fund has significantly reduced inflation expectations, now expecting them at 14.8% this year, and 11.6% next year. [/rtl]
    [rtl]Azour considered that the crises witnessed by the region affect its economies, and this justifies the difference in expectations between one region and another.[/rtl][/size]


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