Gulf Economic Capabilities Are Growing, Impacting the Global Arena

The Gulf economies are among the ten largest in the world. (AFP)
The Gulf economies are among the ten largest in the world. (AFP)
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Gulf Economic Capabilities Are Growing, Impacting the Global Arena

The Gulf economies are among the ten largest in the world. (AFP)
The Gulf economies are among the ten largest in the world. (AFP)

The visits by Indian, Japanese, and Turkish leaders to the Gulf within a week reflected the region's outstanding role on the global economic scene.

They reflect the importance of economic relations between the Gulf countries and the three countries that signed financial agreements and memorandums of understanding in various sectors and fields.

Top 10 global economies

The combined GDP of the growing Gulf economies are projected to reach $ $6 trillion by 2050, according to World Bank estimates, which places them among the top ten economies in the world.

The world is led by the US with a GDP of $25 trillion, followed by China, Japan, and Germany, then India, the UK, France, Canada, and Russia, while Italy stands in the tenth place with a GDP of $1.9 trillion.

According to the World Bank, if the GCC countries implemented a green growth strategy that would help and accelerate their economic diversification, GDP could grow to over $13 trillion by 2050.

Sustainability

President of the Federation of GCC Chambers Hassan al-Huwaizi said the Gulf countries have benefited from several factors creating sustainability for the Gulf economy.

They followed the latest modern technologies in the oil and gas industry, harnessing the financial revenues of the sector to support other economic and industrial sectors to achieve added value to the Gulf economy.

They aim to establish a sustainable Gulf economy, said Huwaizi.

He indicated that the GCC countries have worked to qualify their human forces, especially their national cadres, to contribute to economic development, which helped in creating a sustainable economy.

In the past few years, the Gulf countries have implemented structural economic reforms by modernizing and developing legislation and regulations to provide more facilities and incentives supporting their economies and attracting foreign capital to non-oil sectors to reduce oil dependency.

Huwaizi stressed that the GCC countries tended to diversify the sources of domestic products by relying on other sectors such as petrochemicals, industry, travel, tourism, the entertainment sector, artificial intelligence, and the digital revolution.

He explained that the development and sustainability of the oil industry and the qualification of national cadres, attracting foreign investment, and diversifying sources of GDP had a role in creating sustainability for the Gulf economy.

Impacting the global scene

The expert addressed the impact of the Gulf economy on the global economy, saying it stands among the top economies because of its domestic solid product.

Petrochemicals, aviation, ports, industry, and the financial sectors ensured the stability of the global economy, said Huwaizi, noting that Gulf leaders are keen to achieve regional political and security stability, which boosts international peace.

He also referred to the efforts of the GCC states to build strategic partnerships with global economic blocs, including the US-Gulf Summit in Jeddah in July 2022 and the Riyadh Arab-China Summit for Cooperation and Development, affirming the Gulf states' endeavor to boost strategic partnerships.

Strengths

Huwaizi identified the strengths of the Gulf economy by benefiting from the technical and information revolution, supporting the growth and development of all sectors.

The GCC countries supported the oil and gas industry sector and harnessed advanced modern technologies, starting with exploration and production, refining, and distribution operations, which provided the budgets of the Gulf states with huge financial revenues.

The Gulf states possess an advanced financial and banking sector with substantial financial assets, capital, and investments, said Huwaizi.

He added that the GCC countries had made great strides towards achieving economic unity by adopting the customs union system, Gulf rail and electrical linkages, and implementing the Gulf common market.

The developments increased intra-regional trade between the Gulf states to approximately $102.8 billion in 2021.

The cumulative number of licenses granted to GCC citizens who carry out economic activities in other member states has also increased to more than 60,000 until the end of 2021.

Non-oil sectors

Huwaizi noted that the GCC countries were keen to diversify their economy by supporting and developing other sectors besides oil and gas.

The Gulf states believe the petrochemical sector is among the most important for construction and development, he said, adding that the Gulf industry sector's contribution to the GDP exceeded more than 11.5 percent.

The Gulf private sector, represented by the Federation of GCC Chambers, will play an essential role in defining the investment opportunities available in the region, said Huwaizi.



IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.


Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
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Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)

Copper dropped on Friday and was set for its biggest weekly drop in London since March, as a rout in technology stocks battered markets.

Benchmark three-month copper on the London Metal Exchange was down 1.3% at $13,663 a metric ton by 0700 GMT. That placed it on track to fall 3.44% in the week, Reuters said.

The most-traded copper contract on the Shanghai Futures Exchange fell 1.08% to 106,830 yuan ($16,018.17) a ton.

The weakness reflects worries over AI investment, ‌with copper increasingly ‌influenced by "sentiment towards data center expansion," said ‌Craig ⁠Lang, principal analyst ⁠at CRU.

Technology shares were battered after Democratic wins in the US midterms fueled concerns that new regulatory oversight could cap the AI buildout.

On the other hand, supply constraints cushioned copper's decline.

"I would be cautious about calling this a sustained correction, given ongoing mine supply challenges and exceptionally tight ⁠metal availability outside the US," Lang said.

Copper stocks ‌in SHFE-monitored warehouses <CU-STX-SGH> fell by ‌over 24% this week to just 33,848 tons — the lowest ‌in almost three years. The closely watched Yangshan copper ‌premium <SMM-CUYP-CN>, a gauge of appetite for imports into key consumer China, increased to $210 a ton on Thursday, matching its record high.

Smelters in the country are facing a double squeeze of negative treatment ‌charges and lower sulfuric acid prices.

Meanwhile, warehouse inventories outside the US have been drawn ⁠down as ⁠material was pulled into the country ahead of a potential tariff on imports of refined copper.

"These physical constraints should provide some support against weaker investor sentiment," Lang said.

Among LME metals, aluminium lost 0.54%, zinc lost 1.42%, lead lost 0.45%, nickel dipped 0.23% and tin gained 0.83%.

On the SHFE, aluminium nudged down only 0.04%, zinc lost 1.35%, lead was little changed, down only 0.03%, nickel rose 2.14% and tin dropped 3.45%.

SHFE inventories were down across the board this week, led by sharp drops in aluminium <AL-STX-SGH> and lead <PB-STX-SGH>.