Progress toward diversifying non-oil sectors will help the six-nation Gulf Cooperation Council economies boost GDP prospects in 2018, says global financial services firm, UBS.
“GCC countries are still adjusting to the new economic reality of lower oil prices, despite the recent recovery,” said UBS’ head of wealth management for the region, Ali Janoudi.
“Ambitious reform plans across the region are balancing the need for a more broad-based, diversified economy with respect for local traditions. We think the progress achieved so far brightens the region's outlook and expect GDP growth to rebound to 2.3 percent in 2018 from 0.6 percent this year," he added.
Investors, however, should still be alert to emerging opportunities and risks resulting from monetary tightening, heavy political calendars, technological disruption, and environmental and social change, UBS warned.
“Periods of high economic growth often sow the seeds of their demise. But there is little evidence today of an impending recession,” said Mark Haefele, Global Chief Investment Officer at UBS Wealth Management.
The year so far has been the strongest for the global economy since 2011, according to UBS’ estimates. Growth will likely rise to 3.8 percent from 3.1 percent in 2016, before stabilising at 3.8 percent in 2018.
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