(MENAFN- The Peninsula)
Driven by itshuge financial reserves and continued public sector spending ahead of the FIFA 2022 World Cup, Qatari Economy is projected to grow stronger in 2017, compared to the regional peers. Qatar's economic growth is forecast to grow at a rate of 3.3 percent in 2017 up from 2.6 percent in 2016, followed by Kuwait (2.6 percent), UAE (2.5 percent) and Saudi Arabia (1.8 percent).
According to the global and regional economic outlook and sector analysis of Coface, the worldwide leader in trade credit management solutions and risk information services, Qatar's huge financial reserves and still-strong revenues from its gas sector will ensure continued public sector spending ahead of the 22 World Cup. This will keep the country's growth trajectory relatively high in the region.
The Coface analysis shows that GCC economies have recorded a sharp slowdown in 2016 amidst public sector spending cuts, tightening liquidity, and investor uncertainty. All GCC countries except Kuwait, had seen economic contraction in 2016. UAE growth will pick up in 2017 to reach 2.5 percent up from 2.3 percent in 2016 because this country is more diversified from oil than its neighbouring GCC countries.
Saudi Arabia's economic growth is expected to accelerate to 1.8 percent in 2017 from 1.3 percent in 2016. The Bahrain economy will shrink further going down to 1.7 percent in 2017 from 2 percent in 2016. Growth in Oman will also dip slightly again to be 1.7 percent in 2017 from 1.8 percent in 2016.
Kuwait's economy had more than doubled from 2015 to 2016 going from 1.1 percent to 2.4 percent. In 2017, the country will grow more and reach 2.6 percent.
Massimo Falcioni (pictured), CEO of Middle East Countries at Coface, said, 'The UAE has remained relatively resilient in the face of lower hydrocarbon prices because of its economic diversity, but the lower oil revenues left government spending constrained and this had a spillover effect on all economic activities. The slight rise in oil prices now should give a corresponding impetus to the UAE economy.
Abu Dhabi, being the most oil-dependent emirate will continue to see a slowdown in 2017. Dubai should be more resilient but some non-oil economic activities could still falter. Overall, the country's growth will be driven by the tourism and financial sectors, while difficulties in the construction sector will remain.Liquidity remains an issue. In the UAE, there is a 4 percent rise in delay of payments, because of a lack of bank lending and a liquidity crunch.
'Oil prices are not expected to return to the previous high levels immediately",Falcioni said.
Based on Coface's monitoring activities of 23,000 companies in the UAE and Saudi Arabia, a total of 814 runaway cases of UAE-based businesses was registered from Q3 2015 to Q4 2016 (six quarters), yielding a 200 per cent increase from the previous year. More than half (55%) of these runaway cases were businesses in the general trading sector.
Globally, growth weakened for the second consecutive year in 2016 to reach 2.5 per cent based on Coface data. A slight improvement (+2.7%) is expected for 2017 especially with the upturn in activity for emerging economies .
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