DUBAI, United Arab Emirates–(BUSINESS WIRE)–The Gulf Cooperation Council (GCC) region’s economy will grow near 2.5
percent in 2018, according to new forecasts from Moody’s Analytics, a
leading provider of economic forecasts and data. Stable energy prices
will underpin this growth, with the price for Brent crude oil
fluctuating in a tight range of $50-60 per barrel.

“OPEC’s likely extension of production cuts, coupled with growing oil
demand from emerging markets, will lead to a decline in global oil
inventories, supporting oil prices in 2018,” said Chris Lafakis, Moody’s
Analytics Energy Economist. “Oil prices will be capped; however, OPEC
countries may not adhere to production cuts. U.S. shale oil producers
will in turn ramp up oil exploration, ensuring that oil trades within a
range.”

Improved current account positions as a result of replenished oil
reserves will support investment in non-oil sectors of the economy as
the Gulf countries attempt to diversify away from dependence on
hydrocarbons. In Saudi Arabia, recent anti-corruption efforts in the
country underscore the commitment to the country’s Vision 2030 economic
transformation program.

Meanwhile, security and refugee concerns in the region will continue to
hamper growth in other economies in the Middle East. Heightened security
fears have severely damaged tourism in Egypt, Tunisia and Jordan, while
low oil prices have curbed remittances from the GCC countries.

“Regional political instability remains the main risk to the Middle
Eastern and North African economies,” said Juan Licari, Moody’s
Analytics Chief International Economist. “An increase in geopolitical
tensions could escalate the region’s refugee crisis, increase government
spending on security and undermine investment.”

Moody’s Analytics produces 30-year baseline economic forecasts and
alternative scenarios for 29 countries across the Middle East and Africa
and the GCC multinational aggregate. Banks, asset managers and
corporates worldwide use Moody’s Analytics forecasts to assess the
impact of economic performance on their portfolios and business.

Firms also use them to address the forward-looking and
probability-weighted aspects of IFRS 9 impairment calculation and
capital adequacy and stress testing exercises. Moody’s Analytics
methodologies are transparent and fully documented to allow for the
identification of scenarios that are associated to customer-defined
severities.

Click
here to learn more about the Moody’s Analytics forecasts for the
Middle East and North Africa.

About Moody’s Analytics

Moody’s Analytics helps capital markets and risk management
professionals worldwide respond to an evolving marketplace with
confidence. The company offers unique tools and best practices for
measuring and managing risk through expertise and experience in credit
analysis, economic research and financial risk management. By providing
leading-edge software, advisory services, and research, including the
proprietary analysis of Moody’s Investors Service. Moody’s Analytics
integrates and customizes its offerings to address specific business
challenges. Moody's Analytics is a subsidiary of Moody's Corporation
(NYSE: MCO), which reported revenue of $3.6 billion in 2016, employs
approximately 11,700 people worldwide and maintains a presence in 41
countries. Further information is available at www.moodysanalytics.com.

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Contacts

MOODY’S ANALYTICS
Katerina Soumilova, 001.212.553.1177
[email protected]
or
MOODY’S
MIDDLE-EAST
Nayla Hussein-Ahmed, 0044.207.772.5373
[email protected]
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