WB: GCC Economies to Expand in 2022

The GCC economies are projected to expand by 6.9 % in 2022 before moderating to 3.7 % and 2.4 % in 2023 and 2024, according to the World Bank. The removal of pandemic restrictions, higher oil prices and increased hydrocarbon production drove strong recoveries in 2021 and 2022 across the GCC, the World Bank said in its new GCC Economic Update. The World Bank’s new GCC Economic Update titled ‘Green Growth Opportunities in the GCC’, examines the development of the green growth sectors and looks at the potential opportunities this could provide for the GCC countries. According to the World Bank, the GCC countries’ total GDP is projected to be close to US$2 trillion in 2022.

‘If the GCC continued business as usual, their combined GDP would grow to an expected US$6 trillion by 2050. However, if the GCC countries implemented a green growth strategy that would help and accelerate their economic diversification, GDP could have the potential to grow to over US$13 trillion by 2050,’ the report noted. Supported by higher hydrocarbon prices, the GCC region is expected to register strong twin surpluses in 2022 and continue over the medium term. The regional fiscal balance is projected to register a surplus of 5.3 % of GDP in 2022 – the first surplus since 2014 – while the external balance surplus is expected to reach 17.2 % of GDP, as per the World Bank forecasts. Oman’s GDP growth is forecast to reach 4.5 % in 2022 before moderating to an average of 3.2 % in 2023-2024. Saudi Arabia’s economic growth is expected to accelerate to 8.3 % in 2022 before moderating to 3.7 % and 2.3 % in 2023 and 2024, respectively.

As per the World Bank, the UAE’s real GDP is expected to grow by 5.9 % this year before moderating to 4.1 % in 2023 as slower global demand dampens growth due to tightening financial conditions. Higher oil export volumes coupled with a revival in non-oil demand will support strong economic growth in 2022, it said. Bahrain’s economic outlook hangs on oil market prospects and the government’s commitment to the reform agenda. Growth is expected to accelerate to 3.8 % in 2022; mainly driven by the non-hydrocarbon sector. Kuwait’s economic growth is forecast to accelerate in 2022 to 8.5 % before moderating to 2.5 % in 2023 and 2024, respectively. Qatar’s real GDP is estimated to rise to 4 % in 2022.