Sign in
Saudi Arabia and the UAE will lead the regional “investment pipeline” this year, according to Fitch Ratings’ 2024 GCC Corporates Outlook report. The ratings agency expects non-energy sectors to harness state-led initiatives as well as fresh infrastructure investment and an emphasis on key sectors, including tourism.
BUT- Slightly slower growth: Fitch Ratings sees momentum for non-oil GDP in the GCC decelerating, growing at a 3.7% clip in 2024, dipping slightly from the 4.2% the agency penciled in for 2023. Saudi Arabia’s plan to pace out the implementation of some of its mega projects factor into the revised projection.
REMEMBER- The government is positive on its non-oil GDP, expecting it to grow between 4.5-5.0% this year, said Economy and Planning Minister Faisal Alibrahim at the WEF in Davos last week.
In tune with what the pundits are saying: Non-oil GDP in the Kingdom is expected to grow 3%-4% every year through 2030 on the back of efforts to diversify away from oil, according to Moody’s Analytics in December. The World Bank said in November 2023 that it expects the non-oil economy to grow at a 4.3% y-o-y clip this year on the back of “looser fiscal policy, robust private consumption, and public investment drive,” cushioning a sluggish oil economy. The Finance Ministry is expecting non-oil activity to have grown 5.9% in 2023.
GCC firms will borrow more: Citing GCC borrowers adapting to the high-interest rate environment and increasing their fixed-income issuances by 3.5x in 2023, the ratings agency sees “debt capital markets activity for corporate sectors [rising], depending on the respective volatility and accessibility of the financial markets.”
