|By Arabian Post Staff| A fall in the value of UK pound will adversely affect the demand of Dubai property emanating from UK nationals. Additionally, the weaker currency is expected to adversely impact tourism as well, given that British and European national are one of the top tourists in Dubai, Global Ivestment House said In a report on the GCC impact of the Brexit decision.
When the Russian rouble was devalued, a similar impact was felt on the Dubai tourism and real estate markets in terms of their exposure to the Russians. The UK remains amongst the top-5 buyers in the Dubai property market and therefore the impact on Dubai will be significant, the assessment noted.
Global expects Brexit and the consequent events to push the US Fed to take a much more dovish view which would result in a delay in the rate rise.
Given the currency peg of the GCC countries, such an event would be more positive for the GCC countries as lower oil prices have resulted in slower growth and a lower interest rate would be conducive in this scenario. However, from the point of view of the local banks, there could be slower rise in interest rate, which is a negative given that this was the main catalyst seen behind their earnings growth trajectory.
Given the GCC’s exports to the UK and the EU remain concentrated to the oil and energy related products, any slowdown in the respective economies on account of the Brexit, may lead to further pressure on the price of oil. While oil has already reacted in anticipation to this, the realization of an actual slowdown will be negative.