Reports say that the financial and business development of UAE and KSA is not affected by the drop of oil prices.
According to the report of a private bank named Crédit Agricole, there is a noticeable growth in the business and financial field of KSA and UAE regardless of the oil prices. Robust development was recorded in the new orders from clients and in production.
Paul Wetterwald, the chief economist of the same bank, says that new project orders and market overseas point out the robust growth. Meanwhile, the vacancy rate touched a three-month high poll.
He adds that this is portrayed in PMI, which is a private sector and is not connected with the oil sector of the UAE, and it did not decrease notably. In the month of April it was 56.8, and in May it was 56.4.
But feed in value did rise up along with a slight downturn of the production price billed by the firms.
He also pointed out that it will be too premature to measure that the drop in oil prices might have caused a reduction in the buyer’s charges.
Paul Wetterwald said that the buyers’ charge index was 4.2% in April and that it is the same as Dubai. In Dubai the inflation was an issue. However, the UAE still has time to feel the nip of the low oil price, but it may affect less, as it has a variety of economic aspects in comparison to other neighboring gulf states.
There was development in KSA as well. The development was confined in new orders, and the speed of development and employment was at ease during the month of May.
Strikingly, says Paul Wetterwald, KSA’s PMI of the previous month was 57.0%. It is the downcast level of the country, and this has been the position since May.
This data presents a report on the economy sectors not connected or related with the oil sector of the country. The prediction about the development of KSA is more orthodox.
For instance, based on the recent Arabia Monetary Authority statistics of KSA, the only good thing is that the Q1 of 2015 had nominal GDP development.
The international price of Crude dropped from $115 to $45, and this is the lowest that it can go. This drop occurred in January 2015 and there was a budget crush for this reason in the GCC. Now, the price of oil per barrel is $60.
But the GCC declined any influence of this sudden drop on their economy or finance. The impression may come clearly at the very end of this year.
The report of the World Bank estimated that the drop of the oil prices will cost the gulf countries $215 billion, which is 14% of their collective gross native outcome of this year. For the first time in last four years, the Middle East will face a fiscal deficit.