DUBAI: The importance of economic diversification, increased global trade, and foreign assets for the GCC countries was highlighted at the Coface Country Risk Conference yesterday.
According to Coface, a leader in trade credit management and risk information solutions, the UAE economy will post strong growth of 3.1 per cent in 2015, very close to the GCC GDP growth forecast of 3.2 per cent. Saudi Arabia is expected to grow by 2.5 per cent.
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“The UAE’s economy is one of the most diversified among the GCC countries. Hydrocarbon revenues account only for 25 per cent of GDP and 20 per cent of total export revenues, and more than 60 per cent of the country’s budget revenues still depend to edge up on the back of non-oil sector development,” said Julien Marcilly, Chief economist, Coface.
“Though the GCC economies are still dependent on the hydrocarbon sector as their main export and source of fiscal revenues, in the past decade respective governments have decided to replace their growth model by economic diversification that aims to reduce dependence on hydrocarbon, where prices are volatile and can be a source of macroeconomic imbalances,” he added.
Although the forecast 2015 rates can still be considered high compared with many emerging and advanced economies, they remain below the region’s average growth rate of 5.8 per cent between 2000 and 2011. The main reason for this slowdown is the decline in oil prices.
