Standard Chartered introduced in the present day its Global Market Outlook for 2025. In its report, the Bank highlighted the Gulf Cooperation Council (GCC) is anticipated to stay a shiny spot for international development in 2025. Despite a projected slowdown in international development to three.1% from 3.2%, the GCC is anticipated to outperform, pushed by resilient non-oil sector development and strategic investments that underpin its financial diversification.
The GCC’s concentrate on long-term transformation continues to defend the area from many international financial challenges. Investment in non-oil sectors and a conducive setting for private-sector development are anticipated to maintain momentum in 2025. The report additionally highlighted that decrease rates of interest are doubtless to supply extra assist, notably for borrowing-sensitive industries throughout Saudi Arabia, the UAE, and Qatar. While broader MENA economies, together with Egypt and Lebanon, face heightened pressures from regional battle, the GCC stays comparatively insulated and well-positioned for regular growth.
Commenting on the report, Ayesha Abbas, Managing Director and Head of Affluent and Wealth Solutions, Europe, Middle East and Africa, and UAE at Standard Chartered, mentioned: “Amid global economic uncertainties, the GCC emerges as a rare bright spot, showcasing its resilience and adaptability. By focusing on economic diversification and leveraging opportunities in non-oil sectors, the region continues to chart a path of sustainable growth.”
She added: “The GCC’s commitment to transformation has positioned it as a dynamic force in the global economy. With its strategic investments and stable outlook, the GCC is set to play a pivotal role in driving global economic momentum in the year ahead.”
Globally, the worldwide economic system is bracing for the fallout from the US election. The clear sweep for President-elect Trump and the Republican occasion offers them a transparent mandate to implement their insurance policies, together with important tariffs on key US buying and selling companions, together with China. Trump’s pro-growth and protectionist insurance policies are more likely to be inflationary for the US, with penalties for the remainder of the world. On the geopolitical entrance, Trump has mentioned that he would finish the wars in Ukraine and the Middle East, which might have far-reaching penalties globally.
Protectionist commerce insurance policies, excessive rates of interest, and geopolitical uncertainties are anticipated to weigh on development. The US, buoyed by its robust consumption and providers sectors, has defied recessionary predictions regardless of elevated rates of interest. However, a softening labour market and slower wage development are anticipated to reasonable shopper spending in 2025.
By distinction, the euro-area economic system continues to wrestle. Germany and France, the area’s largest economies, danger slipping into recession. Renewed US tariffs on the EU would additional weaken the area’s already-fragile economic system. Exports are a major development engine, and the manufacturing sector has already been underneath stress lately from elevated vitality prices, weak demand, and higher competitors from overseas. The Russia-Ukraine scenario is one other supply of danger for Europe, because the potential discount of US assist for Ukraine would place a higher burden on the area. Given restricted fiscal house, these pressures might pressure the ECB to maneuver even quicker on price cuts than anticipated, widening the rate of interest differential with the US.
China as properly is more likely to bear the brunt of US tariff coverage. The authorities ready for the potential fallout by delivering extra stimulus to assist the home economic system in September, aiming to spice up development in late 2024 and early 2025. In a worst-case state of affairs of 60% US tariffs on all imports from China, the Bank expects additional stimulus centered extra on consumption than funding. Net exports contributed considerably to China’s development in 2024 however are anticipated to say no considerably in 2025 and whereas the PBoC is anticipated to maintain financial coverage unfastened, expansionary fiscal coverage would be the greatest supply of assist for 2025 development, with China’s economic system anticipated to develop 4.5% subsequent yr.
Elsewhere throughout Asia, the Bank expects development in ASEAN and India to gradual barely in 2025 versus 2024 due to financial tightening and the moderating financial outlook for key commerce companions – particularly the US, the euro space and China. That mentioned, development within the area ought to stay wholesome.