Forex.com forecasts a positive economic outlook for the GCC region in the second half of 2023
The six GCC countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE – are exhibiting a positive economic outlook for the second half of 2023 (H2 2023) thanks to several factors, including oil prices, according to new research conducted by Forex.com.
Based in New Jersey, Forex.com is part of New York-based financial services StoneX Group Inc. (NASDAQ: SNEX), a publicly traded company that specialises in corporate governance, financial reporting, and disclosure.
According to Forex.com, a global market leader in leveraged trading, GCC stock markets are dominant in global initial public offerings (IPOs), accounting for a sizeable portion of IPO proceeds in 2022.
A robust IPO pipeline is also expected for 2023, indicating continued growth in GCC stock markets.
Healthy outlook
Moreover, ongoing economic recovery, high demand for equities, and diversification initiatives are expected to benefit GCC stock markets in H2 2023, which may also draw profit from the projected global GDP growth of 2.9% for 2023.
However, Forex.com sees the need for the GCC markets to be cautious and keep a close eye on market-specific challenges during H2 2023.
They underlined that the risk of a global economic slowdown could impact GCC stock markets, while higher interest rates, inflation, and less accommodating debt capital markets could pose challenges for GCC corporate and infrastructure issuers.
In addition, geopolitical tensions in the global economy could yet affect H2 market sentiment, and despite a strong IPO pipeline, challenges exist in attracting private companies to the GCC markets.
Ritu Singh, Regional Director of StoneX Group Inc., noted that an optimistic scenario is possible in the GCC markets in H2 2023.
“Despite the decline in crude oil prices during the first half of the year, there may be an upward pressure moving forward due to expected draws in global inventories,” Singh noted.
Booming sectors
Forex.com found the overall economic outlook for the GCC region remaining positive in H2 2023, especially after considering the current and projected growth in the non-oil sector, which is driven by thriving industries such as hospitality, retail, travel and tourism, real estate, financial services, technology, and healthcare.
Accordingly, both the UAE and Saudi Arabia are poised for robust growth with an anticipated non-oil sector expansion of 4.8% each during H2 2023, say Forex.com analysts.
The remaining four GCC countries also show positive trends for H2 2023, despite the fact that oil production cuts may impact future growth.
Commenting on oil, Forex.com’s analysts explained that the crude oil market is influenced by multiple factors, which makes it more complicated to render an accurate outlook for H2 2023.
Such factors may include economic uncertainty, OPEC production cuts and supply disruptions, geopolitical tension, demand-supply dynamics, and energy transition and climate policies, which may impact long-term demand and market sentiment.
StoneX Group Inc., through its subsidiaries, operates a global financial services network that connects companies, organisations, traders and investors to the global market ecosystem through a blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise.
As a Fortune 100 company with a 100-year history, StoneX Group Inc. serves more than 50,000 commercial, institutional and payments clients, and more than 370,000 retail accounts, from 80 offices across six continents.
