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PLEAS IF U HAVE TIME READ THATS BELOW SIR,,
Britain's decision to leave the European Union in last month's referendum saw shockwavAAes on a global scale, as world financial markets plummeted immediately after Vote Leave's 51.9 per cent victory
This historic decision and subsequent impact on the future of the EU and the rest of the world will be immense.
As economists continue to analyse the worldwide post-Brexit effects, what impact will the UK's departure from the European Union have on the Gulf Cooperation Council, or GCC?
Whilst the immediate repercussions are somewhat mixed, it can be reasonably argued that any effect on the financial markets and currencies within the GCC will be short term, with little impact forecast on GCC markets in the mid to long term.
The drop in the pound against the US dollar - with the GCC regional currencies being pegged to the dollar - and interest rates, remain at the forefront of the Brexit analysis in relation to the Gulf region. Should sterling weaken further, UK-based GCC investments could become far more appealing, offering unique opportunities to buy UK assets, relatively inexpensively.
However, although many analysts are of the opinion that there will be little significant impact in the GCC following the Brexit announcement, the US Federal Reserve is expected to adopt a much more dovish standpoint, which could see a delay in a possible rate hike.
As such, with the GCC countries being pegged to the greenback, this would be positive as lower oil prices have led to sluggish growth, thereby making a lower interest rate favourable.
Although, from the stance of local banks, further delay and a slower rise in rates is perceived as negative as this was the primary facilitator behind the course of earnings growth.
Furthermore, as exports to the UK and EU from the GCC are still heavily focused on oil and energy, any potential economic slowdown as a result of Brexit, could, naturally, pile additional pressure on oil prices.
Trade
The six member countries of the GCC form a significant region with regard to trade, being the EU's fourth largest export market as of last year. Looking at the figures on the European Commission's website, the total goods trade between the EU and GCC in 2015 was ?155.5 billion, making the GCC the EU's fifth top trading partner.
Moreover, the growth of EU-GCC trade rose by an annual average of 6.5 per cent between 2008 and 2015; increasing by 55.5 per cent between 2010 and 2015.
In addition, the GCC countries have an ongoing cooperation with the EU on trade and investment. As such, I don't envisage any major disruption to trade in the aftermath of Brexit. Indeed, there is no formal trade agreement between the two regions that will be abandoned due to Brexit, and as it stands, all trade is carried out under a WTO Most Favoured Nation tariff regime, which is the default tariff system when no specific trade agreement is in place.
However, the Joint Council and Joint Cooperation Committee between the EU and GCC reached an agreement in April this year to form more structured talks in future in relation to trade and investment. Until then, it is likely that the UK will continue to trade with the Gulf Region as before, if not at a higher level, due to the inevitable, substantial political pressure within Britain to secure the global trade deals promised by the Leave campaign.
I agree with previous answer and I want to add something more. Meaning for GCC economy depends on how the business partners will treat the UK, as a member of the EU or as an independent state. Brexit will be long term process. Until they negotiate new agreements, new terms, we will see it in the prices of contracts.
