
Economic Outlook
The total value of projects in UAE construction market is
expected to be more than 1.1 TN Dh this year as the value of
announced and planned projects in the UAE in 2014 is
expected to be 315 BN USD (1.15 TN Dh), and as of May
2014, 212 BN USD (778 BN Dh) worth of construction
projects are currently under construction. UAE's
construction market is predicted to return to near full
capacity with a number of megaprojects in the pipeline and
the increase of social infrastructure spend. Construction prices in the UAE are set to rise by 4 to
5% over the course of the year and approximately 6% in 2015. Also the market is showing a
healthy profile with opportunities for SMEs and large international contractors and joint
ventures. Similarly, the supply chain at all levels is seeing strong growth across the range of
schemes.
Four new passenger trains will join the current fleet between Riyadh and Dammam beginning
November this year. The trains are being manufactured in Spain by CAF, a leading global
rolling stock manufacturer. The high-speed train will be initially deployed between Riyadh and
Dammam. Subsequently, the trains will be used from Dammam to Al-Ahsa and Riyadh to AlAhsa. The new trains will be an improved version of the previous trains, and have increased
passenger capacity and luggage facility. They could run up to 180 km/hr even during extreme
weather. Rail transport is of vital support to growth and development in any country so Saudi
Railways Organization is working very hard to provide the best services within the current
operational structure.
According to official figures, Qatar's cost of living based on consumer price index (CPI), rose
3.1% year-on-year (y-o-y) in July mainly on rising rents, furniture and garments. The CPI
inflation was up 0.3% compared to the previous month. The rent, fuel and energy group, which
is the most influential and carries the maximum weight of 32.2% in the CPI basket, recorded an
increase of 7.6% y-o-y in July 2014. According to QNB projections, the country's inflation is
expected to rise to 3.8% in 2014 as higher infrastructure spending will result in a large inflow of
workers, putting pressure on housing and prices. Transport and communication, which have a
weight of 20.5% in the CPI basket, were up 0.5% from the previous month's level. However,
food, beverages and tobacco, which have a weight of 13.2% in the CPI basket, saw 0.8% fall
from July 2013. The index had fallen 1% from the previous month's level.
Oman recorded a surplus of 582.9 MM OMR in the first five months of 2014, which is against a
deficit of 110.4 MM OMR for the same period last year. The reason behind the budget surplus
was mainly due to a marginal growth in government revenues, which edged up 0.5% to 6,044.1
MM OMR in the first five-month period, over the same period of last year. Government
expenditure, on the other hand, grew by 8% to 5,061.2 MM OMR for the first five months of
this year from OMR 4,688.4 million. While investment expenditure increased to 1,124.5 MM
OMR from 1,064.6 MM OMR during the period.
Standard and Poor's has confirmed its "AA/A-1+" long- and short-term foreign and local
currency sovereign credit ratings on Kuwait with "a stable outlook". The rating agency said
Kuwait has a rich oil and gas endowment, which has made it wealthy and enabled it to build
strong external and fiscal balance sheet positions as Kuwait accumulated these through large oil
and gas resources and by managing its wealth in what they (S&P) considered to be a prudent
manner. The ratings are constrained by the geopolitical tensions in the region, as well as
Kuwait's unpredictable and undiversified economy. The general government budget has shown
a surplus of at least 10% of GDP for the past decade. Besides, they also estimate that the
Kuwaiti government will have a surplus of about 30% of GDP for the budget year ending
March 31, 2015.
The International Finance Corporation (IFC), a World Bank affiliate has given the Middle East
and North Africa region 2.5 BN USD in funding in 2013. The IFC funded private sector
projects in various fields including infrastructure, energy, and small and medium enterprises.
Egypt received the largest proportion of funding in the region, approximately 1 BN USD. Last
month the World Bank agreed to provide a loan worth 300 MM USD to the Ministry of Industry
and Foreign Trade to fund small and medium enterprises. Besides, the bank has provided a loan
valued at 500 MM USD to the Ministry of Petroleum in order to provide natural gas to 700,000
homes during the 2013/2014 fiscal year.
New UAE multiple-entry visa system has been adopted which makes multi-stop trips easier and
cheaper for cruise tourists. Amendments include a new multiple entry tourism permit for cruise
passengers and a range of new entry permits for medical tourists and their companions. These
visa options will make travel between UAE and visiting nearby countries easier for travelers
who need to make multiple stops whether by air, land or sea. The new multiple entry tourism
permit for cruise passengers at just 200 Dh (around 50 USD) will now make their travel more
cost effective and logistically more convenient with particular impact on a number of key
markets for which previous regulations made the cost significantly higher, including India,
China, Russia & CIS, South Africa, and Brazil.