Weaker US dollar dents purchasing power and discretionary spending in Gulf

I was invited by Deepthi Nair for The National News to share comments on the impacts of a weaker US dollar for GCC economies.

As the greenback hit this morning its lowest level aginst the Euro since September 2021, I commented that “the cost of non-dollar imports also rises, which in turn, fuels inflation“, warning that “This will be particularly strong for goods such as machinery, consumer electronics and pharmaceuticals, which the Gulf economies import from the EU, Japan and the UK“.

On the impact for tourism, I added that “Travellers from the Eurozone, from pound-sterling areas, will find Gulf destinations cheaper because of a weak dollar,” while “The impact on the outbound tourism could be very different, and we could see Gulf residents face much higher costs for European holidays due to the euro strength. That could potentially massively redirect travel to more regional destinations, such as Egypt, Jordan, or Lebanon, which is reopening to tourism.”

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Picture credits: Getty Images

Nicolas Michelon

Nicolas is a corporate geoeconomics and strategic & business intelligence expert with 25 years of experience in the Asia-Pacific, and more recently in the Gulf and Türkiye. A Managing Partner at Alagan Partners, he advises corporate executives on how to navigate the current geopolitical and geoeconomic environment, mitigate risk and develop prospective scenarios. He is also an Adjunct Professor & Guest Lecturer in geopolitics, geoeconomics and business intelligence at ESCP Business School (France), Galatasaray University (Türkiye), University Mohammed VI Polytechnic (Morocco), and Ecole de Guerre Economique (Paris School of Economic Warfare).