Household spending growth in the Gulf is set to be nearly double that of the US over the next five years, creating a huge opportunity for consumer firms, according to a study by Oxford Economics. A prolonged oil price shock, however, could see that all unwind.
Gulf shoppers are more resilient today than in previous cycles, the firm said. Its forecast holds even if oil prices fall 6% over the next year, driven by governments across the Gulf investing in diversification programs and a boost in crude exports after OPEC+ increased output. But a deeper and sustained slump in oil prices will force governments to rein in spending, which will filter through to consumers.