Dubai - Mubasher: The GCC's economy is to grow 2.5% by 2018 on the back of narrow-range fluctuations in oil prices, Moody’s Analytics said on Monday.
The leading provider of economic forecasts and data said that stable energy prices will boost this growth, as the crude oil price has been swaying between $50 and $60 per barrel.
OPEC’s extension of production cuts, alongside emerging markets' resurgent oil demand will decline global oil inventories and support oil prices in 2018, said Moody’s analytics Energy Economist Chirs Lafakis.
Chris added that oil prices will be capped, however, OPEC countries may not commit to prolonging production curbs. He said that that U.S. shale oil producers would step up oil exploration in an effort to ensure that oil trades are within a range.
The improved current accounts resulted from renewing oil reserves will increase investment in non-oil sectors as part of GCC countries' efforts to diversify their economy away from reliance on hydrocarbons, Chris noted.
He said that Saudi Arabia's anti-corruption drive affirmed its commitment to the ambitious Saudi Vision 2030 which aims to slash the kingdom's reliance on oil.
Moody’s analytics Energy Economist highlighted that security and refugees’ crises in the Arab countries still threaten the economic growth in the Middle East.
“Regional political instability remains the main risk to the Middle East and North African economics,” according to Juan Licari, Moody’s Analytics Chief International Economist.
Security fears have weighed on tourism sector in Egypt, Tunisia and Jordan, while low oil price led to a drop in remittances from the GCC countries.