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‘VAT will increase inflation across the GCC’

April 2016

April 12, 2016 | 12:45 | Dubai

One third (33%) of investment professionals who participated in a survey said that regional inflation will increase with the introduction of Value Added Tax (VAT) in 2018, while 28% stated that this development will increase the cost of doing business. According to the results of the sixth annual Middle East Societies Market Sentiment Survey by CFA Institute, low oil prices, geo-political instability and lower government expenditure are the three most important economic issues for the region in 2016, with respondents noting that revenue diversification strategies will also play a significant role in market performance.

Equity markets in Bahrain and Saudi Arabia will be the most affected markets in the GCC, according to 64% of respondents. Dubai was rated as the most positive in terms of outlook, with 35% per cent of respondents confident of strong performance, while 54% expect further declines in the sovereign credit ratings of GCC countries.

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