Rising Geopolitical Risks add to the Trade Tariff Turmoil...

UAE News:

UAE GDP grew by 4% YoY to AED 1.776bn in 2024, with the non-oil sector driving growth (5% YoY to AED 1.342bn). The transport and storage sector grew the fastest (+9.6% YoY), followed by building & construction (8.4%) and finance & insurance (7.0%).

The EU plans to remove the UAE from its list of high-risk countries for money laundering, in line with changes by the FATF – this would however need final approval from the European Parliament and Council, which have up to two months to raise objections.

Abu Dhabi’s financial centre ADGM, reported a 32% YoY increase in the number of firms registered at the centre and a 245% surge in assets under management. Separately, new operating licences at ADGM grew by 67% in Q1, resulting in over 2,380 total firms.

Construction has begun on the Dubai Metro’s Blue Line: the AED 56bn expansion, which will include 14 stations and connect to the existing Red and Green Lines, is scheduled for completion by 2029. Dubai Metro transported over 2.527bn passengers as of the end of 2024 since its launch in September 2009, and passenger numbers are expected to reach 200k per day by 2030.

MENA News:,

The World Bank, in its latest Global Economic Prospects report, estimates the MENA region to grow by 2.7% this year (downgraded from January projections) and average 3.9% in 2026-2027. The uptick is the result of higher oil activity among oil exporters while oil-importing nations’ growth will be supported by easing inflation that in turn drives private consumption.

Egypt is planning to attract FDI into the tourism sectorprioritising by opening new opportunities, to meet the goal of attracting 30mn tourists annually by 2028. For example, the country plans to add approximately 19k new hotel rooms in 2025 via new projects and expansion of existing projects. The minister of tourism also presented the targeted investments in the field of antiquities preservation and restoration, stating that an average of around 36 such projects have been implemented annually over the past five years.

Egypt allocated Red Sea land (a 174 sq km plot on the coast) to the Finance Ministry for issuing Sukuk in a bid to lower the cost of public debt. No other details were provided.

Financing by Islamic banks and banking units in Oman surged by 13% YoY to OMR 7.1bn by the end of April, according to the Central Bank, while deposits in such entities jumped by 22% YoY to OMR 7.1bn. In comparison, credit disbursed by traditional banks was up 8% YoY to OMR 26.4bn and deposits up 4% to OMR 16.7bn.

Oman’s three- to five-star hotel revenues rose by 17.3% YoY to OMR 109.213mn as of the end of April, thanks to an increase in guests (+8.6% to 831,751) and higher occupancy rates (61.1% from 53.4% a year ago). European tourists formed the bulk (+19.9% to 314,535) alongside guests from Asia (+5.4% to 114.4k) and the GCC (+12.6% to 53.6k).

Residential property prices in Oman increased by 7.3% YoY in Q1 2025, according to NCSI data, thanks to a 6.5% uptick in residential land prices. Oman aims to deliver 62,800 new residential units to the market by 2030, with some 5,500 expected this year.

OpenAI has been discussing potential financing to the tune of USD 40bn with Saudi PIF, and existing UAE shareholder MGX, among others, including India’s Reliance Industries.

Syria’s Central Bank Governor stated that the country will adopt a unified exchange rate, ahead of a transition to a managed float system. The country is also planning to fully reintegrate into the SWIFT international money transfer system within weeks, which will boost trade and investment relations.

The total value of large-scale infrastructure contracts in Saudi Arabia issued in Jan-May 2025 plunged by 77% YoY to SAR 36bn (USD 9.6bn), according to the Saudi Contractors Authority. Contracts issued by PIF companies declined at a sharper rate of 84%, in line with recent statements that the country would be prioritising projects and spending.

Global News:

Earlier in the week, investors found comfort in the progress of US-China trade negotiations, though markets dived following Israel’s military strikes on Iran and retaliation by the end of the week and into Monday. Increased geopolitical risks led regional Middle Eastern equity markets down. Safe-haven currencies rose against the dollar (CHF, JPY) alongside the euro, rising to the highest since October 2021. Oil prices were up more than 7% last week, reaching multi-month highs of near USD 75; both Brent and WTI posted the largest intraday moves since 2022. Gold price surged, rising close to the record-high USD 3500 from intra-day trading in April. Markets are likely to be dominated by higher geopolitical and trade policy risks and higher oil prices, along with disruption of energy markets and global supply chains.

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SOURCE:
Nasser Saidi & Associates