Video|15 August 2024

MENA – S&P Downgrade Hits Israel & UAE’s $ 13B Investment Powers Economic Growth

S&P downgraded Israel’s rating to A with a negative outlook, citing the prolonged impact of regional tension that could potentially drag out to 2025 with risks of wider regional conflict. Increased military spending and infrastructural damage have led to a budgetary hit, where we forecast a budget deficit of 4.3% for the year. While consumption appears to be supporting activity, capital formation recovery will be more prolonged in a climate of tight monetary policy & uncertainty over the reach & time span of regional conflict.

The UAE has expanded its In-Country Value (ICV) programme which seeks to bolster industrial expansion, by redirecting $13 billion to the economy in H1 2024. Efforts continue to enhance the UAE’s business climate and competitiveness, an essential counter to the prolonged high interest rates that dampen investment. We forecast a non-oil GDP growth of 4.6% this year

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