DUBAI, United Arab Emirates-Sunday 26 January 2020 [ AETOS Wire ]
A
survey of nearly 440 senior accountancy experts on economic conditions
in MESA showed a recovery in confidence in Q4. A revival in growth is
likely to come mainly from the non-oil sector as the economy diversifies
Detailed in the latest Global Economic Conditions Survey (GECS), jointly published by ACCA (the Association of Chartered Certified Accountants) and IMA®
(Institute of Management Accountants) the findings also point to mixed
results from government spending measures as some economies make greater
efforts to boost the non-oil sectors of their economies, e.g. United
Arab Emirates (UAE), Qatar and Saudi Arabia.
Commenting on the findings, Fazeela Gopalani, Head of Middle East ACCA, said: ‘A
revival in growth is likely to come from the non-oil sector as the
economy diversifies. Reforms in the entertainment and tourism sectors
are expected to boost growth in Saudi Arabia this year. The Q4 GECS
recorded a significant improvement in orders and confidence compared
with Q3, suggesting a brighter outlook. Non-oil private sector growth is
likely to support growth in 2020, especially with the World Expo set to
take place in Dubai later in the year.’
The
dominant influence on confidence in the Middle East region is
fluctuations in oil prices. Both confidence and oil prices recovered in
Q4 and there was also a lessening of geopolitical risk in the region.
Oil prices are expected to be in the $60 to $70 per barrel range this
year. A positive development for those countries with a fixed exchange
rate with the US dollar (Saudi Arabia, United Arab Emirates (UAE), Oman,
Bahrain and Qatar) is the reduction in interest rates by the US Federal
Reserve. The US cuts in the second half of last year totalled ¾
percentage point and were immediately followed by reductions of similar
size in these countries
In
Q4, most of the components of the regional index are slightly below
their long-run average. This is consistent with growth in the region of
around 1.5% to 2% in 2019.
Last
year GDP growth in Saudi Arabia slowed to less than ½%, dragged lower
by falling oil production and lower average oil prices. As the largest
oil exporter Saudi Arabia is at the forefront of OPEC efforts to
stabilise prices by controlling output. Saudi oil output is likely to be
cut again this year as these efforts continue.
There
is limited official data available so far on UAE economic activity in
2019. But survey data points to annual GDP growth of between 1.5% and 2%
last year. The GECS orders index averaged -20 over the four quarters
of 2019, little changed compared with 2018 (-19), when UAE growth is
officially recorded at 1.7%. But the UAE’s oil production, which fell
7% last year, will decline again slightly in 2020 according to the OPEC+
agreement reached last December. Based on the most recent GECS orders
index values, which were above recent averages, the outlook is for GDP
growth this year of around 2%, boosted by non-oil activity.
Speaking
of the global picture Michael Taylor, chief economist at ACCA said:
‘Many risks to the global economy in 2020 are the same as in 2019,
including trade tensions between the US and China, which were a major
cause of slowing global growth. Recent developments in this area have
been positive, but risks of a re-escalation with renewed tariff
increases remain.
Fazeela
Gopalani concludes: ‘Lower interest rates in the region should
stimulate private sector credit growth and help to boost the non-oil
private sector economy. The real estate sector, increasingly important
in many economies in the region, will benefit especially from lower
borrowing costs. Encouragingly, the region’s GECS index that measures
problems accessing finance is close to a three-year low in Q4.
GECS Q4 2020 can be found online at: https://www.accaglobal.com/gb/en/professional-insights/global-economics/GECS_Q4_2020.html
About ACCA
ACCA
(the Association of Chartered Certified Accountants) is the global body
for professional accountants, offering business-relevant, first-choice
qualifications to people of application, ability and ambition around the
world who seek a rewarding career in accountancy, finance and
management.
ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179
countries, helping them to develop successful careers in accounting and
business, with the skills required by employers. ACCA works through a
network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328
approved learning providers who provide high standards of learning and
development. Through its public interest remit, ACCA promotes
appropriate regulation of accounting and conducts relevant research to
ensure accountancy continues to grow in reputation and influence.
ACCA
has introduced major innovations to its flagship qualification to
ensure its members and future members continue to be the most valued, up
to date and sought-after accountancy professionals globally. Founded in
1904, ACCA has consistently held unique core values: opportunity,
diversity, innovation, integrity and accountability. More information is
here: www.accaglobal.com
About IMA® (Institute of Management Accountants)
IMA®, named 2017 and 2018 Professional Body of the Year by The Accountant/International Accounting Bulletin,
is one of the largest and most respected associations focused
exclusively on advancing the management accounting profession. Globally,
IMA supports the profession through research, the CMA®
(Certified Management Accountant) program, continuing education,
networking and advocacy of the highest ethical business practices. IMA
has a global network of more than 100,000 members in 140 countries and 300 professional
and student chapters Headquartered in Montvale, N.J., USA, IMA provides
localized services through its four global regions: The Americas,
Asia/Pacific, Europe, and Middle East/India. For more information about
IMA, please visit www.imanet.org.
Contacts
Nadia Manuelli
E: nadia.manuelli@accaglobal.com
T: +44 (0)20 7059 5661
M: +44 (0)7808 940139
Twitter @ACCANews
www.accaglobal.com
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