5 Reasons Why the Gulf Region Missed the Recession
Recovery and growth have been evident in the Gulf region since 2009. While other nations continue to struggle under the weight of unemployment, massive national debt and contractions seen in various economic sectors, the Arabian Gulf nations are recording growth and budget surpluses in excess of expectations.
Why is this the case?
5 Reasons Why the Recession Didn’t Harm the Gulf
1) Oil Prices Recovered
Although the prices plunged in late 2008 and the oil export revenues shrunk around $100 billion in the three months leading up to December of that year, recovery in the price of oil was swift and revenues soon increased back to sustainable levels.
2) Conservative Budgets
In the face of declining prices, governments across the Gulf set their fiscal budgets using conservative price estimates. This resulted in more realistic spending programs and a more measured approach to government action. When prices recovered and came in more than 50 per cent higher than estimates, the current budgets were well supported and surpluses became common.
3) “Rationalization” Within the Property Market
Most notably in the UAE, corrections in the real estate sector have been helpful to the overall economy. The “rationalization,” as it was termed, came swiftly in 2009 and the UAE government stepped in to make sure prices did not slide further.
4) Attractive to Investors
Even in the recent recession investors were looking for secure and potentially profitable investments and many put their faith in the Gulf region. This confidence kept the economies buoyant despite worldwide panic.
5) Banking Regulations to Increase Credit
Governments of the Gulf news jobs nations have been swift to react by not only injecting funds into the banking industry, but lowering interest rates, offering guarantees and trimming requirements on bank deposits. For the most part these actions have had the desired effect and private sector lending has increased.
Although the recession has had an effect on regulations and real estate among other things, the future looks bright for the Gulf region and there are plenty of jobs available.