General market overview

The global economy began 2022 on a firm, albeit uneven footing, with many markets expecting a robust recovery following the pandemic.

However, despite 2022 starting on a solid base, the war in Ukraine alongside renewed COVID-19 lockdowns in China, has destabilised the supply chain once more, causing widespread disruption. In parallel, higher energy costs, raised commodity prices, labour skill shortages, and the impact of climate change, are all combining to test the resilience of the global economy, which now finds itself in uncertain territory with inflation on the rise and economic growth anticipated to slow.

In the Middle East, the global pandemic seems to be a distant memory. Economies rebounded during 2021 and into 2022, partly due to the rising cost of oil per barrel, which has helped create more liquidity for the sovereign wealth funds that continue to drive nation-building programmes.

Game-changing giga-projects such as The Red Sea Resort, Neom, the Diriyah Gate, Amaala, King Salman Park and SEVEN entertainment districts, will ensure that Saudi Arabia remains the hottest market in the region. Qatar will focus on government investment projects such as; Lusail, Qatar Rail, and Free Zones following the completion of FIFA World Cup Qatar 2022™, whereas the United Arab Emirates progress, with its large-scale developments, will be driven by its cultural and infrastructure development agenda. Mixed-use, hospitality and residential communities remain prominent sectors in the UAE.

Across the Gulf, the cost of transportation has increased and imported goods prices continue to rise.

According to the Federal Competitiveness and Statistics Centre, the Consumer Price Index (CPI) in the UAE had an inflation rate of 2.5 percent year-on-year at the end of 2021. The country’s inflation rate has since increased to 6.77 percent in the second quarter of 2022, up from 3.43 percent in the first quarter of 2022.

By the end of this calendar year, the UAE’s economy is expected to have grown by 5.1 percent.