Saudi Arabia, India and Indonesia Set To Be 2024’s Fastest Growing Global Economies
Saudi Arabia will be among the world’s fastest growing economies in 2024, according to a note published by credit ratings agency Moody’s this week, with Kingdom’s GDP growth forecast to expand by 4.6% next year. This means that the Gulf’s biggest economy will be among the three top fastest growing countries in the world next year, with only India and Indonesia set to expand faster. These two latter nations are respectively expected to grow at 6.2% and 5% each next year.
Saudi Arabia also ranks ahead of the likes of Sub-Saharan Africa (4.5%), China (4%), Asia-Pacific (4 per cent) and Central Europe (3.7%) in terms of growth forecasts for next year.
Following an aggressive interest rate hiking cycle, the rest of the globe is still grappling with tepid growth. The United States, Canada, France and Germany are all set to experience growth below 1% next year.
“We expect growth to remain below potential in 2024 in most large economies, slowing compared with 2023 on the combined impact of high prices and past monetary tightening,” said Moody’s.
“However, the slowdown will be moderate and, assuming central banks are successful in containing inflationary pressures, less restrictive monetary policy as we move through 2024 should help growth to recover closer to pre-pandemic rates by 2025,” the note adds.
Oil supply boost for Middle East
On the Middle East, Moody’s further highlighted that “robust oil prices and the potential reversal of voluntary oil production cuts by producers such as Saudi Arabia and the UAE could contribute to stronger growth in 2024.”
Saudi Arabia currently has an A1 credit rating with a positive outlook while the UAE is rated Aa2 with a stable outlook.
Looking more broadly across the globe, Moody’s expects narrowing fiscal deficits in most countries next year.
“Primary balances are likely to improve for around 70% of sovereigns; the median sovereign primary balance will improve by 0.4 percentage points of GDP,” says Moody’s. “The fiscal consolidation we forecast will, in most cases, stabilise debt-to-GDP ratios and even contribute to slight declines, but not place debt on a firm downward trajectory.”
Another interesting note from Moody’s pertains to weather phenomenon El Niño, which is expected to increase the variability of climate conditions in the Asia Pacific (APAC) region and Latin America next year.
“Lower-income countries, with a high share of food and fuel in their consumption (such as in Sub-Saharan Africa) and large imports of food and energy (such as in Egypt and Tunisia), are among the most exposed to the impact of high inflation and subdued growth prospects on social strains,” says Moody’s.
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