Healthy economic outlook of GCC countries.

Byline: S. Kamal Hayder Kazmi

According to the International statistics, the world economy is projected to increase at 3 percent in 2019- a significant drop from 2017-18 for emerging market and developing economies also advanced economies - before recovering to 3.4 percent in 2020.

The global growth pattern reflects that gross domestic product (GDP) growth is predicted to moderate into 2020 and beyond for a group of systemic economies comprising US, Europe, China, and Japan - which together account for close to half of worldwide GDP. It is also revealed that the global economy is in a synchronized slowdown, with growth for 2019 downgraded again - to 3 percent - its slowest pace since the global financial crisis.

Statistics revealed that leading advanced economies continue to slow in 2019 with the US growth projected to slow down to 2.5 percent in thus year from 3 percent in 2018 with the economy projected to slow down more to 2.3 percent in 2020. For the US, trade related uncertainty has had negative effects on investment, but employment and consumption continue to be robust, buoyed also by policy stimulus.

In the Euro area, growth has been downgraded due to weak exports, while Brexit-related uncertainty continues to weaken growth in the UK. Large emerging market economies such as Brazil, Mexico, Russia and Saudi Arabia are projected to increase in 2019 about 1 percent or less, considerably below their historical averages.

India's 2019 GDP growth is revised downwards to 6.1 percent as against to 6.8 percent in 2019. In India, growth softened in 2019 as corporate and environmental regulatory uncertainty, together with concerns about the health of the non-bank financial sector that weighed on demand.

China's growth is projected at 6.1 percent in 2019 as against to 6.6 percent in 2018. On the other hand various economists also recorded that the economies of the GCC recovered in 2018 despite signs of weakness in the global economic outlook, reinforcing the perception that GCC economies' fortunes are still inextricably tied to oil.

The steady rise in oil prices until October 2018 lifted growth in the GCC economies, from an average of -0.2 percent during 2017 to 2.0 percent during 2018. Two of the region's largest economies Saudi Arabia and Kuwait, also Oman, emerged from recession in 2018. Growth outturns were driven by higher oil production in the second half of 2018, higher capital investment made possible because of the increase in oil...