For the past decade, the seven largest emerging market economies (the E7*) have monopolised the spotlight. We think the Gulf Cooperation Council (GCC**) economies deserve more attention from global business than they are currently receiving.
Here are three reasons why:
However, this is not the full picture. With the opportunity of a bigger workforce comes the challenge of creating an extra 10 million jobs by 2025.
We think this challenge could provide the Gulf with a golden opportunity to push through the reforms needed to diversify away from oil and gas based production and create the jobs of the future.
The Gulf also has the potential to transform into the international Islamic finance hub and become a staging post for South to South investment.
PwC GCI hits a new high
In November, our leading indicator of global consumer spending, the PwC Global Consumer Index (GCI), hit its highest level since we started to publish this in October last year, growing by 3.8% year-on-year (see page 4). This is driven in large part by more positive economic sentiment in most advanced economies, particularly the UK and the US.
Eurozone not a drag on global GDP
There was even some positive news coming out of the Eurozone. The latest Q3 GDP data showed the bloc grew by 0.1% quarter on quarter, implying it is no longer dragging down global GDP.
However, divergences within the Eurozone are still marked with the peripheral economies having a long way to go to reach their pre-crisis GDP levels.
Figure 1: Non-oil GDP has grown faster than oil GDP in the two largest GCC economies
*Emerging 7 (E7): China, India, Brazil, Russia,Mexico, Turkey and Indonesia
** Gulf Cooperation Council (GCC): United Arab Emirates, Saudi Arabia, Bahrain, Oman, Qatar and Kuwait