PwC Middle East Experts Weigh In on Economic Trends and Transaction Activity

Resilient growth amid economic uncertainty

On March 18, PwC Middle East hosted its monthly “Transforming Our Region” webcast, featuring company leaders Richard Boxshall, chief economist; Rand Shuqair, director of Corporate Finance; and Zubin Chiba, head of Corporate Finance.
 
Boxshall once again provided a positive economic outlook for the region, albeit after a long cautionary excursion through the tempests created by the recent on-off-on-maybe tariffs introduced by the Trump administration. In Boxshall’s view, even with the irregularities around announcements and uncertainties around enforcement (or sustained applicability), the tariffs imposed by the U.S. and by other countries in response have gained enough momentum to significantly alter the global trade landscape. Inflation rate rises and supply chain disruptions, both caused or exacerbated by tariffs, have dampened global economic outlooks. Saudi Arabia’s economy grew in 2024 relative to 2023, even as the oil sector contracted, reinforcing the fundamental regional shift that TBR explored recently.
 
In the second half of the webcast, Shuqair and Chiba reviewed transaction activity in the region, comparing 2024 to the previous two years and noting an overall slowdown in volume concurrent with an increase in value from 2023 to 2024, with most of the transactions executed by corporate actors, not private equity (PE). As Chiba noted, both the sovereign wealth funds and the region’s corporate giants have been using transactions to “support the transformation agenda at home.”
 
Chiba also highlighted the importance of technology and artificial intelligence in driving deals, the sustained appeal of green energy and climate tech, and the growing interest among global private equity firms in the size and scale of opportunities in the region. In Chiba’s view, global PE firms are “deploying, not just raising” capital in the region. As an aside, Boxshall noted that PE activity is yet another non-oil contributor to the region’s economies, helping with diversification.

Big Four firms expand regional footprint with innovation hubs and green initiatives

PwC Middle East’s webcast provides excellent monthly insights into the region’s economies, but it is not the only active Big Four firm. As TBR reported in our Fall 2024 Management Consulting Benchmark, KPMG “announced the opening of Risk Hub in the United Arab Emirates (UAE) in collaboration with Microsoft and IBM, paving the way for more in-person, tech-enabled GRC [governance, risk and compliance] discussions with regional clients embarking on their digital transformation programs.” TBR also learned in February that KPMG intends to open a new Ignition Center in Riyadh, Saudi Arabia, in 2025, building on the firm’s global network of innovation and transformation centers.
 
Echoing Chiba’s comment that green energy remains an attractive area, Deloitte announced a green skills and green economy training program in January, in coordination with UAE universities. As TBR noted in our Fall 2024 Management Consulting Benchmark: “Deloitte announced the opening of a Deloitte Innovation Hub in Egypt, which will include a $30 million investment over the next three years in the country. Deloitte is looking to staff the hub with 5,000 employees supporting Europe and regional clients by providing services including AI, marketing and commerce, cloud, and cybersecurity, among others.”
 
In a 2020 blog, we wrote, “According to the Central Agency for Public Mobilization and Statistics in Egypt, approximately 500,000 students graduate from universities in Egypt every year, of which around 90,000 speak English, turning the country into a favorable destination for firms to invest in. Just like in other emerging markets, Deloitte will face competition staffing the centers as IT services peers like IBM and Capgemini, among others, have well-established operations in the country.”
 
Notably, PwC did not address this issue during the webcast.