The year 2012 will be a challenging one and it is hard to predict whether Gulf Cooperation Council (GCC) countries will enjoy a stable or a volatile economy if faced with a new crisis, a leading analyst has said.
Middle East economies will be driven by reforms undertaken by GCC governments as well as their future growth strategy, said Mr Omar Al Juraifani, a leading economic and financial analyst.
Hence, there is a need for further reforms while making the best use of successful international experiences in this regard, said Mr Al Juraifani, who is the Co-Founder and Member of the Asharqia Chamber Young Businessmen Executive Council.
“It is hard for us to predict the points of weakness of markets and know exactly when they experience a recession or even how to avoid its consequential damages by 100 per cent.
“However, we can identify market indexes so as to be well prepared for a possible recession — while keeping in mind that financial laws and legislation are one of the most important indicators, simply because if laws are lenient the volume of liquidity will be affected leading to an increase in expenditures that can lead to inflation and then a high risk of recession,” Mr Al Juraifani, who also acts as a financial advisor for leading investment projects in the GCC, said.
He said the year 2012 will be stable for GCC countries, but they are likely to see slow growth due to lack of demand for energy in Europe and China.
However, this will not reflect on the growth of local companies due to government spending on infrastructure projects, especially in Saudi Arabia, he said.
“I believe that Saudi Arabia needs to enhance its legislative investment infrastructure with more laws, utilise government expenditure in employing more citizens and not to export the nation’s resources abroad so as to achieve the best possible outcomes,” he said.