GCC Economies See Growth in 2021 on Higher Oil Output

GCC countries’ economies are expected to have grown by a cumulative 3.1 % in 2021, reversing a 5.2 % decline last year, according to a recent report by the GCC Statistical Center. The predicted expansion in output is attributed to higher oil output, particularly in the fourth quarter. The elimination of movement barriers and rising vaccination rates are also playing major roles as the pandemic’s adverse effects start to ease off. As for next year, the GCC’s economy is projected to expand by a lower 2.7 % followed by a more robust 3.6 % in 2023.

The center also projects that the non-oil economy will have widened by 3.4 % in 2021. In the following two years, the growth rate will be a higher 3.7 and 4.2 %, respectively. This is driven by the lifting of travel restrictions by GCC states. Private sector activities are also expected to improve as the transportation and retail sectors recover.

Additionally, oil production is set to increase in 2022, albeit cautiously, the report said. The main risks that are facing the sector are the outbreak of new variants — such as omicron — or a slowdown in vaccination campaigns in emerging and developing countries. This will hamper the rebound experienced in key sectors such as tourism and transportation in the council.