Riyadh: The Gulf Cooperation Council (GCC) economies are projected to expand by 5.9 per cent overall in 2022, with this recovery likely to continue in the medium-term, driven by the hydrocarbon and non-hydrocarbon sectors.
The UAE’s economic recovery is projected to continue in 2022, with growth anticipated to reach 4.7 per cent driven by oil and non-oil sectors, the World Bank said in a new report.
In Saudi Arabia, growth is expected to accelerate to 7 per cent, driven by stronger oil output following OPEC+ production cuts and continued growth in non-oil sectors, and supported by stronger consumption, increased tourism, and higher domestic capital spending, the report added.
Bahrain’s economy is expected to accelerate to 3.5 per cent, Kuwait 5.7 per cent, Oman 5.6 per cent, and Qatar 4.9 per cent.
The latest issue of the World Bank’s Gulf Economic Update (GEU) “Achieving Climate Change Pledges” describes the GCC countries as rebounding robustly from the COVID-19 pandemic in the course of 2021 and at the beginning of 2022. It attributes the rebound to a broadly successful vaccination rollout across the GCC, the easing of pandemic restrictions, and developments in the hydrocarbon market. As a result, fiscal deficits have markedly improved, with the GCC external balance reaching pre-pandemic levels in 2021 as energy prices and export earnings strengthened.
As major hydrocarbon exporters, GCC countries may also benefit from changes in the energy markets brought about by the war in Ukraine. These countries may see strong fiscal and external surpluses, which could help spur consumer confidence and investments, the report added.
“As GCC countries commit to the net-zero objectives laid out in their pledges and strategies, it is important to restructure energy and water subsidies and address the GCC’s challenge of moving to a more sustainable growth model less hydrocarbon dependent and managing the transition to a global low-carbon economic environment that risk to see their oil revenues reduced in the next few decades,” said Issam Abousleiman, World Bank Regional Director for the GCC.