Non-oil growth to remain dynamic in UAE, Saudi Arabia in 2024: S&P

Non-oil growth to remain dynamic in UAE, Saudi Arabia in 2024: S&P

Non-oil growth will remain dynamic in Saudi Arabia and the UAE this year as their respective banking sectors are poised to continue their growth above the rest of the Gulf Cooperative Council (GCC) region, S&P Global Ratings said. The growth will be driven by strong credit demand led by a dynamic non-oil sector and economic diversification programmes, the rating agency said in its “GCC Banking Sector Outlook 2024” report. Headline real GDP growth is expected to accelerate in all GCC countries in 2024, aside from Bahrain. “We expect GCC interest rates will remain high but fall by 1% by the end of the year, in step with the US Fed. Inflation will remain close to target and contained by price administration measures,” the report added. Notwithstanding volatile supply-demand dynamics, S&P expects oil prices to remain broadly stable over the year, supporting continued fiscal expenditure. “Ongoing or worsening geopolitical tensions pose a risk to this assumption, but weaker-than-expected growth in China could pose downside risks to oil prices, dent sentiment, and lead to some fiscal strain in sovereigns with higher fiscal break-even prices.” Saudi Arabia and the UAE have the strongest return on assets forecasts and compare well with regional