Economic confidence among chief executive officers in the Middle East and North Africa (Mena) region slipped in the final quarter of last year to a three-year low, according to a recent report. 

 

The YPO Global Pulse Confidence Index for the Mena region declined for the fifth consecutive quarter, falling nearly one point to 56.4, below the global confidence level of 58.

 

The drop in confidence was felt across most of the major economies within the region, as low oil prices and political and social unrest in many countries continued to erode confidence. 

 

Economic confidence in the UAE fell 7.2 points to 50.3, its lowest score in the six-year history of the index. 

 

Similarly, Saudi Arabia continued its alarming slide, plummeting 14.7 points to 39.4, following a 17.9-point decline in the previous quarter. 

 

Additional declines occurred in Egypt, Kazakhstan, Pakistan and Syria. 

 

In stark contrast, Lebanon reported an increase in confidence, climbing 4.7 points to 53.6.

 

Hatem El-Nazer, managing partner at HK Ventures and a member of the YPO Qatar and Cairo chapters, said: “Low oil prices and civil unrest in the region continue to impact confidence levels among business leaders.

 

“Without a rise in oil prices or at least some control on production, it’s likely that most oil exporting countries in the region will face a particularly tough 2016. While not all countries in the region are oil exporters, CEOs across the region will remain somewhat risk-averse in the current climate, particularly in the GCC where governments are under pressure to cut spending and increase their non-oil revenue.”

 

The negative impact of falling oil prices can be seen quite clearly in the Gulf Cooperation Council (GCC) sub-region of Mena among the major oil exporting countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. 

 

The confidence among GCC countries has fallen 25 points since oil prices began to decline in October 2014 from 70 to 45. The drop in oil prices forces those governments to curtail spending, raise taxes or borrow since oil revenues finance government spending.  

 

Globally, the index composite score remained unchanged at 58 in the last quarter of 2015, its lowest level since the third quarter of 2011, at the height of the global economic recession. - TradeArabia News Service