GCC economic growth to hit 2.5% in 2018: Moody’s

The GCC region’s economy is expected to grow by 2.5 percent in 2018, backed by stable energy prices, Moody’s Analytics said in a report.

“OPEC’s likely extension of production cuts, coupled with growing oil demand from emerging markets, will lead to a decline in global oil inventories, supporting oil prices in 2018,” said Chris Lafakis, Moody’s Analytics energy economist.

However, OPEC countries may not comply with the oil output cuts, while US shale oil producers will ramp up crude exploration, ensuring that oil trades within a range, he added.

Among GCC countries, improved current account positions due to replenished oil reserves will help boost investment in non-oil economic sectors, as the region looks to reduce dependence on hydrocarbon exports.

In Saudi Arabia, the current anti-corruption crackdown underscores the countries’ commitment to its Vision 2030 economic transformation plan, Moody’s said.

Elsewhere in the Middle East, security concerns will continue to hamper growth, the report said.

“Regional political instability remains the main risk to the Middle Eastern and North African economics. An increase in geopolitical tensions could escalate the region’s refugee crisis, increase government spending on security, and undermine investment,” said Juan Licari, Moodys Analytics chief international economist.