Emirates News Agency – “First Abu Dhabi” expects Gulf economies to grow by 4.2% in 2023

ABU DHABI, January 23 / WAM / First Abu Dhabi Bank expects that the GCC region will continue to outperform the global economy in terms of growth in 2023.
In the Global Investment Prospects Report 2023, issued today under the title “Towards a New Economic Cycle”, the bank said that it expects the Gulf region’s GDP to reach about 4.2% this year, after reaching nearly 6.5% by the end of 2022.
The report, prepared by a team of investment experts at the bank, is a study on the global economic situation, the investment environment, and the most prominent macroeconomic trends.
In terms of financial markets, the report indicated that the investment trends witnessed in 2022 may continue during the first quarter of 2023, but the report expects the recovery of these markets to begin by the summer.

Financial analysis experts at First Abu Dhabi Bank believe that interest rates in the United States will stabilize later this year, as they currently stand at 4.33%, and may be the main reason for avoiding risk by investors, with the possibility of a recession during the first half of the year.
The report indicated that the increasing rise in interest rates has reduced investors’ interest in traditional investments such as bonds and stocks, compared to cash deposits. However, when the expected recession occurs in the United States, this is an indication for investing in risky assets, especially with the expected large drop in stock prices immediately after the start of the recession.
First Abu Dhabi Bank’s expectations indicate that strong oil revenues will continue to support hydrocarbon exporters in the GCC region, which in turn will support the activities of non-oil sectors in the region, and return the surplus to government balance sheets.
However, work is needed to achieve economic diversification, which is one of the main ingredients for economic growth in the Gulf countries. The supporting sectors include the inbound tourism sector, which continues to grow, as the number of tourists in some GCC countries has increased to levels that exceeded the pre-pandemic stage. Industrial sector activities also continued to expand across the region, including Saudi Arabia and Egypt.
In addition to the main economic indicators, the Global Investment Prospects Report issued by the First Abu Dhabi Bank addresses a number of trends that chart future growth indicators, including focusing on specific sectors, including: crude oil and carbon trade, developments in the Middle East, North Africa and Egypt, Emerging Markets Outlook, Developed Markets Outlook, Real Estate Sector, Environmental, Social and Corporate Governance.
There are also many promising opportunities, including the expected growth in investments related to sustainability. The report also touches on the significant achievement of the green bond market, with its value reaching $2 trillion, and sustainable bonds, which include social bonds linked to sustainability and transactional bonds, which collectively amounted to $3.5 trillion by the end of the third quarter of 2022, according to the Climate Bonds Initiative report. Which was launched under the auspices of the First Abu Dhabi Bank during “Cop 27”.
The Global Investment Prospects report indicates the growing impact of carbon trading on the financial landscape in the Middle East and North Africa region, in light of the launch of many important trading platforms in the GCC and MENA regions during 2022. In the United Arab Emirates, a contract was held ADGM and AirCarbon Exchange (ACX) partner to launch the first regulated carbon credit exchange and its own clearing house. The Abu Dhabi Global Market has also become the first jurisdiction in the world to regulate carbon credits in commodities for trading carbon credits and emissions offsets, and to issue trading licenses to operate spot commodity markets and commodity derivatives.
Other initiatives have been launched in the region, including the establishment of a regional voluntary carbon market company in Saudi Arabia. The Egyptian government also launched the first voluntary African carbon market during COP27.