Middle East economy remains robust, despite oil cuts and geopolitical turbulence, according to PwC’s Economy Watch

Middle East economy remains robust, despite oil cuts and geopolitical turbulence, according to PwC’s Economy Watch

The latest PwC Middle East Economy Watch, released today, indicates that the regional economy remains resilient despite challenges from oil cuts and geopolitical turbulence. The non-oil sector's growth is anticipated to stay robust, buoyed by a stronger-than-expected non-oil GDP performance in 2023 and Purchasing Manager Indices (PMI) in Saudi Arabia and the UAE, which are solidly in expansionary territory in early 2024.The report further emphasises the potential of green finance to hasten economic diversification and job creation across the region, while also attracting Foreign Direct Investment (FDI). It delves into three themes:Oil cuts are extended, but the non-oil sector remains robust: OPEC+ members have agreed to extend production cuts into the second quarter of this year, recognising slower growth in demand for oil, alongside the risk of increasing supply from non-OPEC+ countries. The production cuts mean that the oil sector will likely contract in 2024 compared to last year. Saudi Arabia has also paused its plans to increase oil production capacity given supply/demand dynamics. However, this move will free up capital for investment in alternative energy projects, including gas and renewable energy sources.Currently, Qatar has announced ambitious plans for the expansion of its liquefied natural gas (LNG) capabilities, particularly with