Exciting changes are underway for investors seeking a Golden Visa in the UAE, as the eligibility requirements for property investors have been significantly eased.
The UAE government has announced the removal of the AED1m ($272,000) minimum down payment for real estate investments, marking a groundbreaking shift in the Golden Visa program.
UAE’s economy is forecast to grow by 5.7% YoY in 2024, according to the Undersecretary of the Ministry of Finance. Non-oil GDP growth is estimated to touch 5.9% in 2023 and projected to grow by 4.7% in 2024. UAE is also planning to issue bonds and sukuk valued at AED 5bn in Q1 following a total issuance of AED 7.7bn last year.
Abu Dhabi Department of Economic Development issued 25k+ new economic licenses in 2023 while around 75k+ licenses were renewed. The total capital of new economic licenses from last year rose to more than AED 210.7bn (USD 57.3bn).
India approved a Bilateral Investment Treaty with the UAE to promote more investments, create direct investment opportunities, and improve investor confidence.
Dubai-based Aster DM Healthcare is planning to dual-list in the UAE and Saudi Arabia within the next three to five years, disclosed the firm’s founder and chairman. He also revealed that an agreement to sell a majority share of 65% of the group’s business in the Gulf to a consortium led by Fajr Capital will be closed in the coming weeks.
The IMF (in its latest World Economic Outlook report) lowered Middle East and North Africa growth forecast to 2.9% in 2024, from October 2023’s projection of 3.4%, given the oil production cuts and impacts of the conflict in Gaza on tourism and trade. The drag from oil production cuts is expected to fade in 2024 and non-oil growth in the GCC will support the uptick in growth to 2.7% (2023: 0.5%).
Egypt unexpectedly raised interest rates by 200bps: the deposit and overnight lending rates were hiked to 21.25% and 22.25% respectively, suggesting another devaluation in the offing, as IMF negotiations make progress on the policy and financing package. The IMF lowered its growth forecast for this fiscal year to 3% (from the 3.6% projection in the previous WEO) Separately, various Egyptian new outlets reported that the staff level agreement reached with the IMF is for a loan 2-3 times bigger than the existing USD 3bn deal.
Egypt’s cabinet approved the removal of many tax and fee exemptions for state-owned enterprises, one of the conditions the IMF had put forward in the agreement signed in December 2022. It was clarified that the new regulations “apply to all investment or economic activities undertaken by state agencies” though not applicable to “military work”. The cabinet also approved a 15% reduction in the budget’s investment plan for the current fiscal year, prioritising projects that are 70% or more complete and not starting new projects.
Kuwait expects to post a second consecutive year of deficit as per the 2024-25 budget: deficit is estimated to narrow to KWD 5.9bn from a shortfall of KWD 5.8bn in the previous budget. Oil revenues are estimated to decline by 5.4%compared to the 2023-24 budget, while non-oil revenues see a slight uptick (5.7%). Expenditures are projected to fall by 6.6% to KWD 24.56bn (compared to the 2023-24 budget), dragged down by capex spending (-7.7% to KWD 2.3bn) while subsidies fell sharply (-21.5% to KWD 4.67bn).
South Africa’s Foreign Minister revealed at a news conference that Egypt, Ethiopia, Iran, Saudi Arabia and UAE confirmed plans to join the BRICS bloc after being invited last year. However, a Saudi official later commented that the invite is still “under consideration”.
Saudi Arabia will witness a 105% surge in average wealth per person in the next decade, from the current USD 54,000, according to Henley & Partners BRICS Wealth Report. Average wealth per capita in the UAE is expected to rise by 95% by 2033 while Egypt is projected to grow by 55%. Saudi and UAE are currently home to 58,300 and 116,500 millionaires respectively (+32% and 77% growth since 2013).
Saudi Arabia’s Kafalah program facilitating SMEs allocated SAR 12.1bn (USD 3.22bn) to support 5476 initiatives as of December 2023.
Most major equity markets posted a weekly gain last week except for China’s CSI300 (which saw a rampant sell-off after Evergrande Group’s insolvency proceedings and as investors’ remained unconvinced of stimulus measures) and UK’s FTSE. US markets were supported by robust earnings reports (80% of S&P 500 listed firms have come above expectations) and labour market indicating continued strong growth, while Stoxx touched 2-year highs before declining later in the week. Regional markets were mostly down with geopolitics tensions hurting investor sentiment; Egypt’s discussions with the IMF are ongoing and announcements of additional funding are expected. The dollar gained after Friday’s strong jobs report, while oil prices fell by more than 7% for the week (given uncertain growth in China and expectations of high interest rates for longer) and gold price gained 1%.
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