For the United Arab Emirates, the economic recovery is expected to continue in 2022, with growth expected to reach 4.7% driven by the oil and non-oil sectors, according to the latest issue of the World Bank’s Gulf Economic Update. .
Sunrise reflects off the city skyline in the Marina and Jumeirah Lake Towers areas of Dubai. The World Bank report describes GCC economies as rebounding vigorously from the Covid-19 pandemic during 2021 and early 2022. — AP File Photo
The GCC economies are expected to grow overall by 5.9% in 2022, and this recovery is expected to continue over the medium term, driven by the hydrocarbon and non-hydrocarbon sectors, the World Bank said in a new report.
For the United Arab Emirates, the economic recovery is expected to continue in 2022, with growth expected to reach 4.7% driven by the oil and non-oil sectors, according to the latest issue of the Gulf Economic Update (GEU) from the World Bank titled “Reaching the climate Changing promises.
The report describes the GCC economies as rebounding vigorously from the Covid-19 pandemic during 2021 and early 2022.
The report attributes the rebound to a largely successful rollout of vaccination in the GCC, the easing of pandemic restrictions and developments in the hydrocarbon market. As a result, fiscal deficits have improved markedly, with the GCC external balance reaching pre-pandemic levels in 2021, energy prices and export earnings strengthening.
As major hydrocarbon exporters, the GCC countries could also benefit from changes in energy markets brought about by the war in Ukraine. These countries could run strong fiscal and external surpluses, which could help boost consumer confidence and investment, the report notes.
However, the war has also put energy security high on the agenda of many major oil importers, accelerating their plans to transition to green growth. The GEU contains a special chapter focusing on key steps to take on energy subsidies, fiscal consolidation, and the importance of getting prices right to create an environment that puts the private sector at the forefront of green growth.
“As GCC countries commit to achieving the net zero goals set out in their pledges and strategies, it is important to restructure energy and water subsidies and meet the GCC challenge of moving to a more sustainable growth model less dependent on hydrocarbons and manage the transition to a low-carbon global economic environment that risk seeing their oil revenues decline over the coming decades,” said Issam Abousleiman, Regional Director of the Bank. world for the GCC.
The special chapter of the GEU examines the possibilities of restructuring energy subsidies in the region, as well as the possibilities that exist for GCC countries to become renewable energy powerhouses by diversifying into green technologies. This transition to an environmentally friendly model will be a recurring theme in future issues of the Gulf Economic Update, making it the first in a series that will focus on green growth in the region.
In Saudi Arabia, growth is expected to accelerate to 7.0% in 2022, driven by stronger oil production following OPEC+ production cuts and continued growth in non-oil sectors, and sustained by higher consumption, increased tourism and higher domestic investment spending.
For Qatar, real GDP is expected to grow in 2022 to 4.9% on the back of higher hydrocarbon exports, while private consumption growth could be slightly lower at 4.8% due to potential dilution of World Cup revenue and price increases. .
Oman’s growth in 2022 is expected to reach 5.6%, supported by growth of more than 8.0% in the hydrocarbon sector, while the non-oil economy continues to grow by more than 2.0%, the faster deployment of vaccines strengthening national activity.
In Kuwait, growth in 2022 is expected to accelerate to 5.7%, due to increased oil production as OPEC+ cuts are phased out and domestic demand strengthens.
Bahrain’s economy is expected to accelerate in 2022 to 3.5%, boosted by soaring energy prices. The recovery of the non-oil economy will be driven by the expansion of the transport and communications sectors, as well as the development of agriculture and fisheries.