It is the question everyone always asks me. What is happening to the economy? Are we are going to experience growth? Or is a big, deep recession around the corner?
Well folks, if I knew the answer to that, I wouldn’t be writing this column – I would be back on the beach in Antigua. What I do know, and have the answers to, is what the facts tell us. When it comes to the Middle East, I think the economy has been fairly insulated by oil prices, and there has been a pretty decent build up of savings. So yes, there may be a mild recession. But a deep one? That is not what my crystal ball is seeing right now.
I remember fifteen years ago people were talking about global or economic decoupling, and if the US went into recession, it would not matter. Well how wrong that turned out to be. What happened was the US caught a cold and everyone else gone pneumonia. If the US has a recession, it will impact the Middle East – absolutely it will – but like I said, it will not be a deep recession.
So, what’s happening in the US? If you look at the numbers, you look at disposable income and spending, it feels like we are going back to 2018 with good numbers, low unemployment, and decent economic growth.
I just do not, from where I am sitting, see the economy rolling over. Yes, the markets have been crushed because they got way, way ahead of themselves. When they inducted all that money in the market, they pushed it up too high. Now you are seeing a trend line of what the market looked like in 2016 to 2019. To me, I think if we are back on the trend line. I look ahead to 2024, which is not that far away, we will be in 2024 be in a robust cycle where they Middle East is doing well, the US economy is back up, relations between the US and China have calmed down.
It’s also worth looking at someone else is crystal ball – that of the World Bank. Despite all the concerns, they are now forecasting the UAE economy to grow by 4.1% this year. Those are numbers I am sure everyone in this region will take – and everyone in the west will bite your hands for.
I am optimistic. But – and this is a big but, there is one wild card in all this. Russia. What I am worried about is the on-going war with Ukraine. Putin is not winning, simple as that, whatever the propaganda he puts out. Once you are in the American government like I was, you are always in the American government, so I know a fair bit about what is happening – he’s not winning. And the Ukrainians are being supplied arms from the west to fight him. Right now, unfortunately, he is in a corner and there is no diplomatic solution. His economy is in free fall.
Those things worry me because when you paint someone in a corner, they can have a reaction politically or from a war fare perspective that nobody wants. We just don’t know what that will be – but it can change everything, and in an instant.
The optimist in me says that we can at least get to an impasse with Russia.
*Anthony Scaramucci will be appearing at the Investopia x SALT 23 event in Abu Dhabi March 2 -3
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