The GCC and global economic outlook for 2022 and
beyond were majorly impacted by Russia - Ukraine Crisis, with wider economic ramifications,
sharp increase in fuel prices, continuing supply chain disruptions from China
and European Energy Crisis. This has widely impacted all economies and Capital
Markets around the world. This has resulted in extended period of - funding
winter, large scale layoffs by big technology companies.
Central Banks have carried out various interest
rate hikes frequently during the year to cool down inflationary pressures and
investors are being risk averse. This has resulted in sharp tightening of
global monetary conditions with higher borrowing costs by as much as 4% till
The prospects for a long recession in major global
economies (stagnation and high inflation) such as U.S, Europe and including
China. Economic uncertainty has risen sharply, and expectations for a near-term
recovery are increasingly becoming unclear.
Major GCC countries like UAE and KSA have
performed much better
(GDP growth FY 2022 – 7.40%) compared to developed world, however, are also facing
these headwinds. GCC future outlook remains stable but with lower growth rates expected
around 3.5% as compared to higher rates during 2022 as a result of higher oil
prices and past surpluses. UAE and other GCC countries have been able to bounce
back after a significant drop in growth during the pandemic, however, look
stable and optimistic for 2023.
The GCC region’s major economies have focused on
reforms, expanding public financial markets/IPO’s and diversifying their income
streams with monetary and fiscal changes. They have been able to effectively
manage inflation and have continued to invest heavily in building future
economic infrastructure and technological advancements.
Major events were held such as the FIFA World
Cup and Expo 2020 which had a huge positive economic impact including marked
recovery in tourism, hospitality, airlines recovered, and the high-end real
estate projects. This has boosted the overall investment environment in the
region despite global challenges.