The six major Middle Eastern oil and gas producers part of the Gulf Cooperation Council (GCC) are set to book faster economic growth in 2022 than previously expected, if oil prices don’t pull back significantly next year, a Reuters poll of 21 economists showed on Thursday.
The six countries in the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)—are major producers of oil and gas, and their economies, oil revenues, and current account balances suffered last year from the double whammy of the crash in oil prices and the COVID-19 pandemic.
The economists polled by Reuters this month generally said that prospects for the GCC countries look brighter than in July due to the higher oil prices, easing of COVID-related restrictions, and vaccine rollouts. However, the single most important factor for how fast economies will grow next year will be the price of oil, the experts told Reuters.
This once again highlights the dependence of the largest Middle Eastern oil and gas exporters on commodity prices.
Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is forecast to see its GDP rise by 5.1 percent in 2022, up from expected growth of 2.3 percent in 2021, the Reuters poll found. Goldman Sachs’s prediction in the poll was for massive 7.0-percent economic growth in Saudi Arabia next year.
These estimates are higher than those of the International Monetary Fund (IMF), which said in its World Economic Outlook this month that Saudi Arabia’s economy is expected to grow by 4.8 percent in 2022, an upward revision by 0.4 percent from the forecast in July.
Overall, the IMF revised up slightly its growth forecasts for 2021 for the Middle East and Central Asia in part to reflect improved assessments for some commodity exporters that will outweigh drags from pandemic developments.
The World Bank said in August that the GCC countries need more reforms to diversify from oil and gas. Exports of oil and gas exports remain over 70 percent of total goods exports in Kuwait, Qatar, Saudi Arabia, and Oman. Oil revenues, for their part, exceed 70 percent of total government revenues in Kuwait, Qatar, Oman, and Bahrain, the World Bank noted.
By Tsvetana Paraskova for Oilprice.com
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