The Institute of International Finance expects the total foreign assets of the Gulf Cooperation Council countries to increase to about $4.4 trillion by the end of 2024, supported by current account surpluses expected to record $146 billion.
The institute – headquartered in Washington – estimated that the foreign liabilities of the six countries would amount to about one trillion dollars, which would lead to net foreign assets worth $3.4 trillion.
Investments
Sovereign wealth funds manage two-thirds of the total foreign assets of the GCC countries, which are portfolios of public stocks and fixed-income securities, according to the institute, while the other third is official reserves and foreign assets of commercial banks that are invested in the form of liquid assets.
According to the institute’s estimates, the investments of the Gulf Cooperation Council countries vary according to this detail:
- 35% in stock investments
- 22% in bank deposits
- 17% in foreign direct investment abroad
- 7% in US Treasury bonds
- 10% in other bonds
- 9% in a range of less liquid investments, including non-US bonds, mergers and acquisitions and hedge funds.
Investments in the region
On a regional basis, Gulf investments are distributed as follows:
- 65% in North America and Europe
- 20% in Asia and the Pacific
- 10% in other countries in the Middle East and North Africa region
- 5% in Sub-Saharan Africa and Latin America
Data sources
These data come according to preliminary estimates during which the institute relied on data from the US Department of the Treasury, the Bank for International Settlements on the cross-border assets and liabilities of international banks, the United Nations Organization for Trade and Development (UNCTAD), and from reports issued within the GCC countries.
Data collected by the Institute indicate that sovereign wealth funds in the Gulf Cooperation Council countries have tended, in recent years, towards investing more in global stocks and foreign direct investment, and away from traditional safe assets.
