Increased diversification efforts, the transition to clean energy and political stability have placed economies in the Gulf in their strongest position for growth in 30 years, Standard Chartered’s regional head has said.
Sunil Kaushal, the lender's chief executive for Africa and the Middle East, said he had not seen the region stronger.
“I have not seen a confluence of positive factors coming together at the same time in at least the last 30 years [such as] the political stability, [high] oil prices, the human capital that has been developed … and the focus on diversification of the economy, focus on renewables and alternate energy sources. All this is creating a flywheel effect,” he said.
Across Africa and the Middle East, Mr Kaushal remains “cautiously optimistic” about 2023, “although in Davos, the view is overwhelmingly that it is going to be a year of recession in at least larger markets”.
“We are in some of the most dynamic and most interesting growth markets, and it is not that every market is going to go through a recession”, he said.
There would be “large swathes of growth”, including in China and India.
“You are going to see strong growth in Asean [economies], China, India, which are natural markets for the energy exported out of the Gulf,” he said.
“As well as Europe, having weaned itself partially off from Russian energy, is looking at the Gulf.”
Despite forecasts of very weak growth or even contraction in some regions, Mr Kaushal said while “they are facing severe challenges”, it was not a case of Europe “hurtling towards a deep recession”.
Inflation, including high energy prices and rising borrowing costs last year, did not hinder the group’s performance, said Mr Kaushal.
“The business has performed very strongly at a group level, as well as [in the region] we have grown [in] double digits. And that is a pretty healthy growth,” he said.
“We had challenges, headwinds in terms of currency fluctuations, in some cases a 60 per cent devaluation. But we have held on in terms of our underlying performance and delivered good results.
Standard Chartered said last year it would exit Jordan and Lebanon in the Middle East, as well as Sierra Leone, Angola, Cameroon, Gambia and Zimbabwe in Africa.
In Tanzania and the Ivory Coast, it said it would focus on corporate, commercial and institutional banking services only.
“Saudi [Arabia] has gone really well. Timing was almost perfect in terms of, you know, the economy getting back on a strong footing, oil prices going up. A lot of focus on diversification, investments, etc. So, that has gone well, and the other one is Egypt, which, hopefully, by the middle of this year, we should be in a position to open.”