Latest news with #RichardBoxshall
Khaleej Times
28-07-2025
- Business
- Khaleej Times
UAE: GCC countries shielded from ‘first-order effects' of US tariffs
Gulf Cooperation Council (GCC) countries are largely insulated from the first-order effects' of US tariffs due to their low exposure to goods trade with the United States, according to S&P Global. 'As we approach the August 1 tariff deadline, uncertainty continues to weigh on global markets,' said Sapna Jagtiani, director and lead analyst for the Middle East at S&P Global Ratings. 'As of July 11, there have been 31 tariff-related rating actions — 25 in North America, four in Europe, and two in Asia-Pacific. (In contrast) The GCC remains relatively insulated from the first-order effects of tariffs given the minimal exposure to US goods trade and the low tariff rates applicable to the countries," she added. However, Jagtiani warned of potential indirect effects. 'Slower global demand and softer investment flows could primarily hit the region, particularly through fluctuations in oil prices and supply dynamics." Richard Boxshall, partner and chief economist at PwC Middle East, echoed this sentiment, noting that the recently announced 10 per cent universal US tariff (announced on April 2) is expected to have limited short-term consequences for Gulf economies. Despite this, certain sectors within the GCC could still feel some pressure. According to the Al Jazeera Centre for Studies, the US has maintained a 25 per cent tariff on aluminium and steel — key exports for countries like the UAE and Bahrain. Meanwhile, regional economic ties with the US remain strong. During President Trump's recent visit, the UAE, Saudi Arabia, and Qatar announced over $1 trillion in investments into the US. Elsewhere, in a bid to ease trade tensions, the US and European Union on Sunday reached a deal that imposes a 15 per cent tariff on most EU goods — avoiding a broader trade war. The EU also plans to invest around $600 billion in the US, said US President Donald Trump. Dh954 billion non-oil fiscal revenue Despite global uncertainties, GCC countries have made notable progress in diversifying their economies. Jagtiani noted that non-oil fiscal revenue in the region has doubled over the past decade, reaching an estimated $260 billion (Dh954.2 billion) in 2025 — accounting for 36 per cent of GDP. According to FAB Market Insights and Strategy, the US trade tariffs are clearly set to have a dampening effect on the outlook for global economic activity. 'We currently expect global economic growth of 2.7 per cent this year, followed by a modest improvement, but only to 3.0 per cent in 2026. Within this scenario, we still see structural, tariff-generated inflation pressures as a main hawkish impediment to higher levels of economic expansion,' it said in a note. On the geopolitical front, S&P's Jagtiani said the current ceasefire between Israel and Iran has alleviated immediate credit stress in the region. 'Nonetheless, we view the ceasefire as fragile, with a potential for re-escalation. The duration and involvement of key actors will be crucial in assessing the potential impact of any renewed conflict,' she added.
Arabian Business
24-02-2025
- Business
- Arabian Business
Non-oil sector to be the region's main engine of economic growth
In its February edition of Middle East Economy Watch, auditing and consulting firm PricewaterhouseCoopers (PwC) has highlighted the region's robust non-oil sector as a driver of sustained growth, as well as the renewed emphasis on fiscal discipline, particularly in Saudi Arabia, where spending is being re-prioritised toward critical investments. The above developments become even more significant as OPEC+ has extended production cuts into 2026, limiting oil supply growth amid weaker global demand. The report also touched upon the introduction of corporate tax reforms in the region to align with OECD GloBE rules, underscoring their broader revenue diversification efforts, as well as business leaders' confidence about the region's economic outlook. The report emphasised that the momentum in the non-oil industries continues to offset weakness in the oil sector, and called it the 'main engine of regional economic growth'. It said Abu Dhabi's non-oil sector recorded a 6.6 per cent year-on-year growth in Q3 2024, led by financial services and transportation. Other GCC economies are projected to see steady non-oil GDP growth, ranging from 2.1 per cent in Qatar to 4.5 per cent in the UAE in 2025. PwC expected Brent crude to average in the low $70s per barrel in 2025, down from around $80 in 2024. OPEC+ has slowed the tapering of voluntary production cuts, extending them into 2026. This move aims to stabilise oil prices amid weaker-than-expected demand, particularly from China. However, global uncertainties – including US energy policies – add to market volatility. Richard Boxshall, Partner and Chief Economist, PwC Middle East, commented: 'OPEC+ has been remarkably effective at coordinating oil production over the past decade, shaping both global energy markets and the Middle East's economic trajectory. 'However, there remains uncertainty over how OPEC+ will respond to evolving factors, including the Trump presidency, geopolitical developments in the region, and shifting dynamics in the oil sector. These factors intensify the need and urgency for continued non-oil sector expansion and fiscal adaptability across GCC economies.' On Saudi Arabia, the report said that the country remains committed to its Vision 2030 transformation, with over $5 trillion in active projects. 'The government aims to maximise the impact of public spending through a value-based approach, while maintaining strict fiscal discipline. Its primary focus is on investing in ambitious infrastructure, tourism, and renewable energy projects,' it added. This commitment of Saudi Arabia is exemplified by major developments in Riyadh, such as the Riyadh Metro, New Murabba, and Diriyah Gate, as well as in other regions. With more than 90 per cent of GCC CEOs surveyed expecting revenue growth in 2025 (as per PwC's 28th Annual CEO Survey), Stephen Anderson, Partner, Middle East Strategy Leader, added: 'Despite global uncertainties, the Middle East continues to demonstrate strong economic growth and resilience. 'Business leaders remain confident in the region's economic prospects, with non-oil sector expansion, fiscal policy reforms, and strategic investments positioning GCC economies for sustained and diversified prosperity in 2025.' The report added that the continued commitment of GCC governments to invest in the long-term prosperity of the region's economies, supports a cautiously optimistic outlook for 2025.
Zawya
17-02-2025
- Business
- Zawya
PwC Middle East Economy Watch: GCC strong growth and ambition, balanced with fiscal prudence
Saudi Arabia is balancing fiscal prudence with ambitious investment goals to strengthen the private sector, enhance tourism and advance infrastructure, transforming in line with Vision 2030. GCC economies broaden tax bases, introducing corporate taxes and OECD's GloBE rules from 2025. Non-oil sector growth remains strong, with Abu Dhabi leading at 6.6% year-on-year growth in Q3 2024. CEO confidence in economic growth remains high, with 90% of GCC chief executives expecting revenue growth in 2025. Dubai, United Arab Emirates – The latest Middle East Economy Watch points to sustained growth across the region, driven mainly by the robust non-oil sector. Oil market volatility has prompted a renewed emphasis on fiscal discipline, particularly in Saudi Arabia, where spending is being reprioritised toward critical investments—such as major infrastructure projects in Riyadh aimed at boosting tourism and enhancing quality of life for residents. Meanwhile, GCC countries are introducing corporate tax reforms to align with OECD GloBE rules, underscoring their broader revenue diversification efforts. Despite these headwinds, business leaders remain confident about the region's economic outlook. Richard Boxshall, Partner and Chief Economist, PwC Middle East, commented: "OPEC+ has been remarkably effective at coordinating oil production over the past decade, shaping both global energy markets and the Middle East's economic trajectory. However, there remains uncertainty over how OPEC+ will respond to evolving factors, including the Trump presidency, geopolitical developments in the region, and shifting dynamics in the oil sector. These factors intensify the need and urgency for continued non-oil sector expansion and fiscal adaptability across GCC economies.' The report examines the following: Economic overview and performance - OPEC+ extends oil production cuts: OPEC+ has slowed the tapering of voluntary production cuts, extending them into 2026. This move aims to stabilise oil prices amid weaker-than-expected demand, particularly from China. However, global uncertainties—including US energy policies—add to market volatility. Brent crude is expected to average in the low $70s per barrel in 2025, down from around US$80 in 2024. Non-oil growth remains strong: Momentum in the non-oil industries continues to offset weakness in the oil sector, and is the main engine of regional economic growth. Abu Dhabi's non-oil sector recorded a 6.6% year-on-year growth in Q3 2024, led by financial services and transportation. Other GCC economies are projected to see steady non-oil GDP growth, ranging from 2.1% (Qatar) to 4.5% (UAE) in 2025. Saudi Arabia: Balancing growth with fiscal prudence: Saudi Arabia remains committed to its Vision 2030 transformation, with over $5 trillion in active projects. The government aims to maximise the impact of public spending through a value-based approach, while maintaining strict fiscal discipline. Its primary focus is on investing in ambitious infrastructure, tourism, and renewable energy projects. This commitment is exemplified by major developments in Riyadh—such as the Riyadh Metro, New Murabba, and Diriyah Gate—as well as in other regions. GCC expands taxation for fiscal sustainability: GCC nations are diversifying revenues by expanding taxation and adopting the OECD/G20's global minimum tax rules (Pillar Two) for large multinational enterprises. Except for Saudi Arabia that has not yet made a formal announcement, all GCC countries plan to implement the Global Anti-Base Erosion (GloBE) rules starting 2025, which is expected to raise additional tax revenue for these jurisdictions. CEO confidence in regional growth: Findings from PwC's 28th Annual CEO Survey highlight continued optimism among Middle East business leaders, and more so than their global peers. Notably, 90% of GCC CEOs expect revenue growth in 2025, while 71% of CEOs are confident in domestic economic growth, surpassing the 57% of CEOs globally who share this sentiment. Stephen Anderson, Partner, Middle East Strategy Leader, PwC Middle East, said: "Despite global uncertainties, the Middle East continues to demonstrate strong economic growth and resilience. Business leaders remain confident in the region's economic prospects, with non-oil sector expansion, fiscal policy reforms, and strategic investments positioning GCC economies for sustained and diversified prosperity in 2025." While uncertainties persist—stemming from geopolitical developments and the evolving oil market—the non-oil sector remains robust and is likely to be the primary driver of growth. The strong confidence observed among regional CEOs and the continued commitment of GCC governments to invest in the long-term prosperity of the region's economies, supports a cautiously optimistic outlook for 2025. For further insights, download the full Middle East Economy Watch – February 2025 report on PwC Middle East's website. -Ends- About PwC At PwC, our purpose is to build trust in society and solve important problems. We're a network of firms in 149 countries with more than 370,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at Established in the Middle East for over 40 years, PwC Middle East has 30 offices across 12 countries in the region with around 12,000 people. ( PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. © 2025 PwC. 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