Chief economist for Euler Hermes, Ludovic Subran, has predicted oil prices will rise to $60 a barrel in 2016 and that global economic growth will remain at a “conservative” +2.9%.
The prediction was shared during the 2015 International Trade Observatory summit in Dubai.
Subran expanded: “Global GDP growth will remain below +3% for the third consecutive year at +2.5% in 2015. Mature markets have remained reasonably stable, whereas we have seen clear signs of deterioration in emerging economies. Global trade is set to lose at least $400bn in 2015, reflecting strong deflationary pressures in the short-term. Our expectations for the global economy remain conservative for 2016 at GDP +2.9%, although with some signs of improvement.”
In the GCC region, after a tough year in 2015 with GDP growth +3%, 2016 will generate “modest economic rebound for most countries” of +3.7%.This should be led by a slight rebound in oil prices – forecast to reach $60/barrel and supported by strong financial assets – as four of the top 10 sovereign wealth funds globally are based in the GCC.
“In 2016 GCC countries will absorb adverse external headwinds, and most of them will record higher GDP growth than in 2015 and continue to present solid risk profiles,” declared Mahan Bolourchi, Euler Hermes GCC CEO. “As major producers and exporters of oil and gas, recent downward pressures on prices are clearly detrimental to these countries’ economic performance. Proactive steps are already underway by local governments and economic institutions to reduce the dependency on oil, for example by further increasing industrial diversification and sector promotion.“
