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Thu 31 Oct 2019 01:55 PM

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How the Gulf's top execs feel about economic prospects

New survey of C-suite executives reveals largely upbeat sentiment despite escalating tensions with Iran

How the Gulf's top execs feel about economic prospects

Executives working in the Gulf remain largely upbeat about the outlook for the region, despite escalating tensions with Iran in recent months, according to a new survey.

The Gulf CEO Survey carried out by Oxford Business Group (OBG), which interviewed about 300 C-suite executives, showed that almost three-quarters (72 percent) described their expectations of local business conditions as positive or very positive for the coming 12 months, up from 70.3 percent a year earlier.

Most of the business leaders surveyed also reacted favourably to the level of transparency in place for conducting business relative to the region, with 71 percent describing it as high or very high.

An even larger majority (80 percent) told OBG that they viewed the current tax environment as competitive or very competitive on a global scale.

However, obtaining financing remains problematic for some, with 53 percent describing the ease of access to credit in their market as easy or very easy.

Regional political volatility was by far the biggest business environment concern among executives, beyond movements in commodity prices. More than three-quarters (76 percent) identified it as the top external event they felt could impact the economy in the short to medium term, up from 71 percent last year.

Despite these worries, 63 percent of respondents said they thought it likely or very likely their firm would make an investment in the next 12 months, in a sign of the growing role that the private sector is playing in the regional economy.

Billy FitzHerbert, OBG’s regional editor for the Middle East, said despite facing hurdles which ranged from fluctuating oil prices to regional tensions, there is a definite sense among business leaders that the challenging economic circumstances were being successfully managed.

He added that the private sector spending plans highlighted by the survey bode well for the region, saying that “the broader challenge of generating higher levels of private sector activity in regional economies continues to guide policy".

FitzHerbert said that diversification away from a reliance on hydrocarbons remains the order of the day, and continues to sit  at the centre of the series of development blueprints onto which Gulf countries have mapped future economic prosperity.

“Crucial now will be maintaining the initiatives put in place during more difficult times, ensuring efforts don’t backtrack and the inroads into curbing the mentality of public sector reliance do not diminish as regional economies look ahead and begin to regain firm economic footing," he added.