GCC will outperform global economy in 2024: FAB

The economies of the UAE and Gulf countries will outpace the global forecast for 2024, helped by the domestic multi-year investment cycle in the region, according to First Abu Dhabi Bank’s Global Investment Outlook (GIO) 2024 Report: ‘Making a positive impact’.

Despite recent geopolitical headwinds and muted global recovery, FAB expects national and regional growth to be driven by the robust demand in tourism, real estate, transportation, and manufacturing sectors. FAB sees the UAE’s GDP expanding 3.7 per cent in 2023 and 4 per cent in 2024, and the GCC’s by 3.4 per cent in 2024 - higher than the IMF’s global forecast of 3.1 per cent and 2.1 per cent for the United States in 2024.

The GIO report, written by the bank’s industry experts, examines the current global economic and investment environment, providing insights into key macroeconomic trends.

FAB’s outlook notes that the GCC region continues to be supported by strong growth in non-oil GDP, with 3.4 per cent expected in the medium term as countries in the region continue to diversify their economies. In financial markets, FAB recommends investors diversify the asset allocation in their portfolios as market and economic volatility looks likely to continue in 2024 and build a defensive portfolio to provide flexibility.

The report points out tailwinds such as higher fiscal spending, rapid disinflation and a tight labour market so far supporting consumption and spending and lifting global equity markets but notes a delayed impact of monetary policy decisions could soon take effect until interest rates and inflation come down.