Monthly Insights: August 2023

Major economies continue to show signs of resilience to the scale of monetary tightening taken by central banks. GDP data for both the US and UK has surprised on the upside for Q2 while labour market conditions in the US still look strong this far into the rates cycle. Inflation too is cooling but we expect the Federal Reserve will want to see more entrenched signs of disinflation before it is prepared to shift to an accommodative stance at the end of H1 2024.

Economies across the GCC are being weighed down by lower oil production as OPEC+ has extended and deepened its production cuts. That will put more of the burden on the non-oil sectors to support growth in the region. Dubai’s economy is coming off a high base in 2022 though sectors like transport and tourism are still reporting growth. We now expect Dubai’s GDP to expand by 4% this year, slightly slower than the 4.4% growth recorded in 2022 and lower than our previous forecast of 5%. 

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