Gulf Economies Ride Out Steady US Rates Thanks to Strong Finances and Oil Prices

The Gulf economies have been cushioned from the impact of steady US interest rates thanks to strong government finances, higher oil prices, and continued momentum in economic diversification programs and infrastructure investment.

According to experts, the Federal Reserve's decision to keep interest rates at elevated levels provides Gulf economies with greater stability and clarity regarding financing costs. While some sectors such as real estate and construction are still sensitive to interest rates, strong oil revenues and sustained investment spending provide room to contain the pressure of elevated financing costs.

Hamza Dweik, Head of Trading for the Middle East and North Africa at Saxo Bank, said that the Federal Reserve's decision provides a degree of stability for Gulf economies. He expects Gulf central banks to maintain their current monetary policy stance to preserve alignment with US policy.