Monthly Insights - January

The global economy is likely to see much slower growth this year as the aggressive monetary policy tightening of 2022 starts to bite. However, we expect energy prices to remain elevated, with Brent oil averaging over USD 100 per barrel in 2023, as supply remains constrained and there is limited capacity to increase production within OPEC+. A faster than expected reopening of China’s economy could lead to stronger demand for oil and other commodities in H2 2023. 

The budgets of major GCC oil producers are likely to remain in surplus this year, allowing governments to push ahead with significant investment in infrastructure and strategic sectors.  This will help to mitigate the impact of weaker external demand and slowing private sector consumption and investment.  Consequently, the GCC is likely to be a relative outperformer in terms of growth this year.

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