70% of Middle Eastern executives expect double-dip recession

Middle Eastern executives were the most pessimistic in the world in a new study by Alix Partners in association with the Economist Intelligence Unit.

Seventy per cent expect a double-dip recession compared to 63 per cent of all 500 global senior executives surveyed. This probably reflects the inherent good sense of readers of ArabianMoney.

Arab Spring

It is also doubtless to do with the continuation of the Arab Spring into the winter months with 64 per cent expecting unrest to continue this year. Persistent high food and energy costs also worried 44 per cent of local respondents.

But companies in the Middle East are relatively cash-rich after the past three years with 55 per cent reporting a better cash position, although only 24 per cent plan to spend their cash on domestic acquisitions, well below a more confident Latin America where 43 per cent firms sought acquisitions.

Private equity deals are rare in this environment. Abu Dhabi based Gulf Capital today reported the acquisition of 82.7 per cent of Dubai power generation solutions provider Sakr Energy Solutions for an undisclosed sum, the first such transaction of the year.

Stock markets low

Local stock markets remain in a pitiful slump at a seven-year low in the case of Dubai with confidence clearly shot to pieces. Strange because local business picked up quite sharply in 2011, with record sales for luxury cars for example and UAE oil revenues were high.

Are Middle Eastern executives being too pessimistic or is the rest of the world being too optimistic? Well we will support our home team and agree that the others are over-confident with so much debt still burdening the major economies of the world.