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With the Gulf Cooperation Council’s gross domestic product (GDP) expected to reach $2 trillion in 2022, rising oil exports and a recovery in non-oil demand will support strong economic growth in the UAE, the World Bank said.
Further supported by a favourable business environment and world-class infrastructure, the UAE’s real GDP is expected to grow by 5.9% in 2022 before slowing to 4.1% in 2023 as tightening financial conditions dampen global demand increase. New Gulf Economic Update (GEU) from Bank of Washington.
The IMF’s recently revised World Economic Outlook report forecasts the UAE’s GDP to grow by 5.1 percent this year, compared with a previous forecast of 4.2 percent. This would be the highest growth in the past seven years. The IMF expects MENA GDP to grow by 5.0% this year from 4.1% in 2021, before slowing to 3.6% in 2023 as the global situation worsens.
On the other hand, the GCC economy is expected to grow by 6.9% in 2022, before slowing to 3.7% in 2023 and 2.4% in 2024, according to the World Bank.
“Higher oil revenues coupled with a gradual non-oil recovery in the UAE will boost fiscal revenue, resulting in a fiscal surplus hovering around 4.4% of GDP in 2022. Recent bilateral free trade agreements with Asian partners will be supported by strong oil exports Down to 2022, the current account surplus will reach 11.2% of GDP,” the World Bank said.
The World Bank noted that while the GCC’s GDP is expected to approach $2 trillion in 2022, if the region continues to operate as usual, their combined economy will grow to an expected $6 trillion by 2050.
“However, if the GCC countries implement a green growth strategy that helps and accelerates the diversification of their economies, GDP has the potential to grow to more than $13 trillion by 2050,” it said.
The easing of pandemic restrictions and positive developments in the hydrocarbon market drive a strong recovery across the GCC in 2021 and 2022. The GEU said a strong economic recovery and supply chain bottlenecks pushed inflation in the GCC to an average of 2.1% in 2021 from 0.8% in 2020.
“The GCC region is expected to post a strong double surplus in 2022 and continue in the medium term, supported by rising hydrocarbon prices. The regional fiscal surplus is projected to be 5.3% of GDP in 2022 – this is The first surplus since 2014 – while the external balance of payments surplus is expected to reach 17.2% of GDP,” said the World Bank’s latest update titled “Green Growth”, GCC Opportunities. “
“This is a fantastic and timely opportunity to further diversify the economy through a green growth strategy and play a leading role in the global transition to a low-carbon economy,” said Issam Abousleiman, Regional Director, Gulf Cooperation Council, World Bank.
“The region can leverage the green growth transition by focusing policy on the development of green technologies and associated skilled labor, thereby reversing productivity trends and enabling the region to grow faster.”
Economic growth in Saudi Arabia is expected to accelerate to 8.3% in 2022, before slowing to 3.7% in 2023 and 2.3% in 2024. Qatar’s real GDP is expected to rise to 4.0% in 2022, with exports (5.4%) and government consumption (4.8%) leading the way in terms of demand.
Oman’s economy is expected to continue to recover and strengthen over the medium term, driven by strong energy prices, expansion of oil and gas production, and broad structural reforms. GDP growth is expected to reach 4.5% in 2022 before slowing to an average of 3.2% in 2023-24.
Economic growth in Kuwait is expected to accelerate to 8.5% in 2022 before slowing to 2.5% in 2023 and 2024, respectively, while growth in Bahrain is expected to accelerate to 3.8% in 2022; Driven by the compounds sector, growth in the sector is expected to exceed 4.0%, supported by the full reopening of the economy and stronger manufacturing.
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