Gulf states are pledging massive investments in the US, with Saudi Arabia announcing over $600 billion and the UAE promising $1.4 trillion in various sectors. However, these commitments come amid challenges posed by declining oil prices, which directly impact their economies still heavily reliant on hydrocarbon income. While efforts to diversify into sectors like AI and manufacturing are underway, analysts warn that the substantial investment plans face risks due to the volatility of oil markets, potentially impacting the sustainability of these financial commitments.
Falling oil prices challenge Gulf nations' reliance on hydrocarbon income, hindering their ambitious investment commitments, which aim to diversify economies beyond oil dependence.
Despite impressive reforms in the Gulf states, including Saudi Arabia, oil remains the fundamental economic driver, thus making these countries vulnerable to fluctuating prices.
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