RIYADH: Oil-exporting countries in the Middle East and North Africa region are expected to witness robust growth in 2024, primarily driven by the substantial expansion of their non-oil gross domestic product, according to Fitch Ratings. In a recent report, the credit rating agency mentioned that countries in the region are anticipated to stabilize their oil production in 2024, following the decision by the Organization of the Petroleum Producing Countries and its allies, known as OPEC+, to cut output in 2023. “MENA oil exporters will register stronger growth in 2024, due to momentum in non-oil real GDP (gross domestic product) and broadly stabilizing oil production following output cuts in 2023. Weak global growth in 2024 could prompt further OPEC+ cuts if the oil market shifts decisively into surplus, but the latest deal in end-November 2023 highlighted reluctance to bring output much lower,” said Fitch in the report. Fitch added that countries in the MENA region are expected to witness a 3.5 percent growth in non-oil activities in 2024, driven by economic diversification efforts and new reforms. In its report, the rating agency warned that the ongoing war between Israel and Hamas could pose some risk for regional escalation, and the tensions could also negatively impact the growth of tourism in the region in the near term. “The Israel-Hamas war presents risks to tourism and sentiment, at least in the near term. Multilateral and bilateral financial support is an important mitigant in some countries, alongside some progress with economic and fiscal reforms,” added Fitch. The report highlighted that credit fundamentals in MENA countries are expected to face challenges from high debt burdens and tight financing conditions amid high global interest rates, while domestic interest rates will also remain high given inflation trends. In November, Fitch maintained Saudi Arabia’s Public Investment Fund’s long-term foreign- and local-currency issuer default ratings at “A+” with a stable outlook, as the fund continues to catalyze the Kingdom’s ongoing economic diversification efforts. According to Fitch, an “A+” rating is considered a very high-quality status, indicating the PIF’s strong ability to repay its debts. The credit rating agency also noted that the PIF maintains strong financial autonomy in carrying out its investment.
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