NCB Capital, the invesment banking arm of National Commercial Bank, Saudi Arabia’s largest bank, believes that the Middle East is now set to become a new global growth engine reflecting an ongoing structural shift in the global balance of economic and financial power. In the January edition of the Gulf Cooperation Council monthly economic bulletin, NCB Capital chief economist Jarmo Kotilaine points to a number of facts that back that assertion:

• Attractive macroeconomic fundamentals will likely ensure robust economic growth rates in the years ahead.
• Emerging markets have generally experienced a much milder cyclical correction in this downturn. Moreover, ample surpluses accumulated thanks to cautious government policies during the boom years have been effectively mobilized to smoothe over the cycle without creating major new borrowing needs.
• Driven by oil, demographics and diversification, the GCC is set to become a $2 trillion economy in the next decade, with surpluses largely being utilized toward the development of the non-oil sector. Also, with a young population base, the GCC is well positioned to reap the demographic dividend.

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