The Dubai International Financial Centre (DIFC) today held the first DIFC Forum, a series of quarterly workshops, seminars and conferences for financial services professionals and practitioners. The Forum brought together a select group of 35 chief and senior economists, analysts and market specialists from within the MENA region as well as from international circles, to discuss financial developments around the region and to address some of the challenges relating to the expansion of local economies and capital markets.
The Forum, organized and hosted by the DIFC, featured prominent speakers including representatives from regional and international financial institutions, think tanks and government bodies. This event presented them with an opportunity for debate on financial market issues and policies, suggestions for innovative economic analysis and research, and recommendations for greater understanding and better response to regional challenges.
MENA has achieved above average growth rates sustained by favourable global developments, such as low inflation and interest rates, leading to real estate and financial market booms. The region’s growth boom has been investment led, with increased infrastructure investment. In 2006, the GCC region saw its real GDP rise by 6.5 - 7%.
During the Forum, consensus forecasts for the MENA region were discussed, covering topics such as Real GDP growth, Consumer Price Indices, Current Account Balances, Financial Markets forecasts and Oil forecasts. It was agreed that the quality of price indices would require further research to reflect the current inflation level and that the consumption basket should be more transparent to mirror real consumption behaviour. All of the market specialists present concurred that accurate inflation projections are necessary in order to determine precise GDP forecasts. Overall, a slight recovery for GCC markets is anticipated with a correction or slow-down in the North African markets after a strong performance over the past two years. Forecasts of oil prices covered a wide range, reflecting the uncertainty and volatility of the energy market with an average expected oil price of $55.3 in June 2007 and $60.4 for January 2008.
The economic development and outlook for specific countries in the region were also analysed, focusing on issues such as the stock market challenge in Saudi Arabia, Kuwait’s stellar economic performance in 2006 and the anticipated recovery of equity markets in the UAE following last year’s severe retraction.
The Forum’s annual conference will take place towards the end of the year with further in-depth discussions of the finance and economics of each country within the region. The possibility of the establishment of a MENA economic association was also considered.
During his speech on the effect of Asia’s growth on the global economy and the MENA region, Dr. Yuwa Hedrick-Wong, Economic Advisor of MasterCard International, highlighted the rapid economic integration that has recently taken place in Asia and the implications and opportunities for the Middle East, in terms of its changing role as a commodity producer and technology and manufacturing goods consumer.
Dr. Christian Kruse of the Swiss Banking Institute, and Mr. Leo Keller, CEO of Netbreeze, presented a joint workshop on “International Financial Centre Reputation Monitoring”, which outlined the development of a new instrument for the strategic management and development of financial centres. By profiling core topics and challenges confronted by a specific financial centre, such as DIFC, Dr. Kruse was able to reveal the initial results for Dubai, benchmarking them against the results of other financial centres, such as London, New York and Hong Kong.
Dr. Omar Bin Sulaiman, Governor of DIFC, said: “A fundamental part of DIFC’s mandate is to foster the development of financial markets in the Middle East, North Africa and Central Asia region, and the aim of the DIFC Forum is to achieve this by increasing knowledge and awareness of economic developments and prospects, and by effectively promoting and strengthening the exchange of information and analysis between countries within this region. I think today’s discussions have demonstrated everyone’s commitment to this task and I look forward to future such successful Forums.”
At the close of the DIFC Inaugural Forum, Dr. Nasser Al Saidi, Chief Economist of the DIFC, said: “Through this Forum, the DIFC looks to set a standard for the relevance and quality of analysis and information and become a reference source for economic and financial analysis. We are developing consensus economic and financial forecasts for the MENA countries which we hope will be useful for industries and policy makers.”
