GCC economies set for rate-cut boost

GCC economies set for rate-cut boost

The Kingdom Tower stands illuminated at night on King Fahad Road in Riyadh. Sukuk issuances in Saudi Arabia coupled with bond issuances in the UAE during the second half of 2023 and pushed aggregate issuances in the GCC to over $100 billion at $107.8 billion by mid-December-2023. — File photo

Published: Mon 1 Jan 2024, 8:00 AM

The impact on GCC economies due to the impending rates cuts by global central banks in 2024 is expected to be largely positive, a report said.

According to Kamco Invest’s GCC Fixed Income Market Update for December 2023, this will happen “as global economic slowdown in now expected to be softer-than-expected, with soft landing in economic growth. This coupled with lower inflation rates in the GCC should augur well for the region in terms of GDP growth backed by thriving non-oil GDP, a strong project pipeline and elevated oil price,” the report, written by Junaid Ansari, Kamco Invest's Head of Investment Strategy & Research, said. In addition, the strong credit profile of most countries in the GCC with recent upgrades this year also provides stability to currency and the fixed income funding market, it added.

In the primary market, GCC bonds and sukuk issuances exceeded market expectations