Middle East Economic Optimism
Although the Middle East is quite unstable politically at the moment, the business optimism in the region remains high. According to a survey for the Business Optimism Index for the second quarter released by The National Commercial Bank and Dun & Bradstreet South Asia Middle East Ltd., business optimism remains very positive.
Looking Up in the Middle East
Conducted in March, the survey found positive results. The Saudi Arabia hydrocarbon sector is optimistic, with the overall BOI composite score at 50 for Q2, rather than the 49 it was at from Q1. The BOI for selling prices is 53 in Q2, rather than the 48 in Q1.
At a press conference on Saturday, Said Al-Shaikh, a senior vice president and group chief economist at the NCB said, “The BOI survey results broadly reflect the newly announced fiscal package by King Abdullah, which is amounting SR500 billion, as the impact on the wider economy is likely to be substantial, especially on the non-hydrocarbon sector. Saudi companies expect business conditions to improve further in the near term, as all the indices reflected increases.”
He discussed the housing market, saying that it should improve in another two years as the spending package has put an emphasis on housing. As he said, “The recently announced spending package will help resolve the bottleneck in the housing market by 2013-14.” In addition, Saudi Arabia will have a 5.8% GDP growth with the expected rise in oil production.
In response to the survey, the CFO of D&B, Phil Strange, said: “Business optimism levels in Saudi Arabia remain very positive. All sectors recorded improvement in Q2 from already elevated levels of optimism with the exception of trade and hospitality, which saw a small fall albeit still remaining in very positive territory. The spike in oil prices and the governments’ increasing stimulation of the nonoil sector are causing the business community to remain extremely bullish in their outlook.”