The economies of the Middle East, particularly those of the United Arab Emirates (UAE) and Saudi Arabia, are demonstrating resilience in the face of oil production cuts and geopolitical tensions. This resilience is attributed to the robust growth of the non-oil sector in these countries.
A recent report by PwC Middle East highlights the positive performance of the non-oil sector in the UAE and Saudi Arabia. This growth is expected to continue, counterbalancing the anticipated contraction in the oil sector due to production cuts implemented by OPEC+ members.
The UAE has achieved a significant milestone in its economic diversification strategy, with the non-oil sector now contributing over 73% of its GDP. This achievement reflects the growing confidence of the private sector and international investors in the UAE’s business environment.
Saudi Arabia is making significant progress towards its Vision 2030 goals, which aim to diversify the economy and reduce dependence on oil revenue. The kingdom’s economic reforms and initiatives are fostering the development of key sectors such as technology, tourism, infrastructure, and property.
The report also emphasizes the growing importance of green finance in the region. The increasing issuance of green bonds and sukuk, particularly in the UAE and Saudi Arabia, demonstrates the region’s commitment to sustainability and its potential to attract foreign direct investment (FDI).
Disruptions to Red Sea trade routes have led to renewed discussions about establishing alternative trade corridors. While both the India-Middle East-Europe Economic Corridor (IMEC) and Iraq’s Development Road offer potential solutions, progress on these initiatives will likely depend on the resolution of ongoing regional conflicts.
Publish 07 Apr 2024
Source: https://www.khaleejtimes.com/business/uae-saudi-arabia-to-drive-regional-growth-despite-oil-cuts-conflicts
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