Deutsche Bank Middle East CEO admits market sentiment is poor for Gulf economies

Market sentiment is not great for Gulf states at the moment, Deutsche Bank’s Middle East and Africa CEO said Wednesday, acknowledging the concerns that investors have held about the region in recent years.

“The private sector across the region, frankly, is still, sentiment-wise, not feeling too positive,” Jamal Al Kishi told CNBC’s Hadley Gamble, discussing his economic outlook at the World Economic Forum on the Middle East and North Africa in Amman, Jordan. “The economy has hit a soft patch following the collapse of crude prices.”

Indeed, forecasters point to falling numbers on a range of fronts. While Saudi Arabia saw strong economic growth toward the end of last year, “a slowdown has almost certainly got underway at the start of 2019 on the back of oil production cuts,” according to London-based consultancy Capital Economics.

Bahrain had to get a $10 billion aid package from its from its neighbors late last year, and Moody’s has stripped Oman of it’s last investment-grade rating.

Activity in non-oil sectors of the UAE are sluggish, and the country fell into deflation in January. Property prices in the commercial hub of Dubai are down some 25 percent since 2014 and growth slowed to 1.9 percent last year from 3.1 percent in 2017, the lowest rate in eight years.

The transport and storage sector, a pillar of the city’s operations as a logistics hub, grew 2.1 percent in 2018, down from 8.4 percent in 2017 — “the slowest rate of growth since 2013,” according to Emirates NBD, Dubai’s largest bank. This was linked to the slowdown in trade volumes worldwide amid rising protectionism. Dubai’s stock market in 2018 was the worst performer of all its Middle East peers.