GCC markets fell by 2.7% during October despite oil prices’ surge

Kuwait – Kuwait Financial Centre “Markaz” recently released its Monthly Economic and Market commentary for October 2017. Markaz report stated that during October 2017, oil prices rebounded by 6.7% to close above USD 60/bbl, an event that failed to cheer the regional stock markets. The broader S&P GCC Composite Index fell by 2.7% during October 2017 on the backdrop of very strong global and emerging markets.

The latest IMF report is significant in that it is very positive on developed and emerging economies while it has subdued outlook for the MENA region despite global recovery. While global growth is projected at 3.7% for 2018, emerging market growth projected at 4.9% (2018), GCC growth for next year is expected at 2.2%. IMF notes that geopolitical tensions and conflicts continue to generate humanitarian and economic costs. It continues to stress on fiscal consolidation to maintain sustainability. Notable concerns include declining private credit growth, increasing non-performing loans, increasing youth unemployment, poor ease of doing business rankings, lack of trade openness and export diversity. Adoption of financial technology is spotted as an opportunity amidst these gloomy predictions.

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