ABOUT TOWN
Be safe! Coface Emirates Services, in partnership with UAE Insurer National General Insurance (NGI) hosted its annual MENA Country Risk Conference at Atlantis, The Palm in Dubai. The conference was an opportunity for members of the business and financial community to meet with experts in these sectors, and to get their opinion on the latest trends in the regional economy.
A
t this occasion, Coface confirmed the stability of GCC countries’ economies, while many European countries continue to face a worsening economic situation, following the example of Spain and Italy, both downgraded to B last January. UAE maintained its A3 country risk assessment, while Saudi Arabia and Qatar were also stable at A4 and A2 respectively. Julien Marcilly, Senior Economist at Coface, said, “Growth will remain robust in the GCC countries this year. In addition, they will continue to benefit from strong fiscal and current account surpluses in the short-term. However there is a growing sovereign risk in some oil importer countries of the MENA region”. Elaborating further on the macroeconomic outlook in the UAE and the region, Khatija Haque, Senior Economist, Emirates NBD said, that tourism and 14
MAY 2013
hospitality have been the major drivers of growth in the UAE. According to Khatija, even though hotels and restaurants contribute only 4% to UAE’s GDP, the trend is positive. Also, there has been a 40% year on year increase on tourists from the region, especially KSA. Talking about the construction sector she said that government spending on this sector in the UAE has been considerable less than the GCC, as the government has been cautious about the new projects plus wants to clear the debts as well. Moving on to trade, Khatija remarked that even though they expected UAE’s trade to shrink because of the global economic crisis, but it has expanded because of the increase in the intra-GCC trade. It was close to 40% in 2012. “The fastest growth in bilateral trade has been between the UAE and Oman,” she remarked.
Elaborating on this, she said that UAE has not been impacted by the Eurozone crisis partly because Europe contributes only 12% to UAE’s trade unlike Qatar which is the most exposed in the region, because of it’s oil and gas imports. According to Gregory Le Henand, Country Manager of Coface Emirates Services, “The UAE has become the hub of the Middle East and Africa Region, with over 65% of Fortune 500 companies establishing their regional HQ in the country. In 2012, over 70% of the UAE GDP has been exported to the Middle East, Africa and Asia region through Emirati companies, it is therefore crucial for the development of the economy to support this effort through the trade instrument that constitutes Trade Credit Insurance”. The conference provided a very interesting overview of how the region is doing and what does the future hold for the UAE.