The World Bank expected that the economies of the Gulf Cooperation Council (GCC) will achieve a growth of 5.9 percent in 2022, which is an increase of 1.2 percentage points over what was expected at the beginning of this year.
In its report issued yesterday, the World Bank lowered its forecast for global economic growth for the second time this year as the Ukraine war, now in its fourth month, exacerbated the slowdown caused by the Covid-19 pandemic.
The highlights of the report in the part related to the Middle East and North Africa are as follows:
In Saudi Arabia, the strong growth in oil production and a strong recovery in the non-oil sector is expected to push the growth rate in 2022 to a record 7%, which represents its highest level in ten years, before declining to 3.8% in 2023.
The UAE should also benefit from the rise in oil prices in the short term. It is expected to record a 4.7 percent growth in 2022 from 2.8 percent in 2021. In the medium term, reforms related to deepening capital markets, increasing labor market flexibility, and accelerating the pace of technological innovation will support growth.
In Kuwait, growth is expected to reach 5.7 percent in 2022 from 2.3 percent in 2021.
In Qatar, growth is expected to reach 4.9 percent from 1.5 percent in 2021.
In Bahrain, growth is expected to record 3.5 percent from 2.2 percent in 2021.
Iraq’s GDP growth is expected to reach 8.8 percent, driven by the recovery in the oil sector with the gradual lifting of production restrictions decided by “OPEC +”. However, the lack of electricity supply, exacerbated by the imbalances in energy imports and the limitations of absorptive capacity, leads to limiting the growth of the non-oil sector.
Output growth in oil importing countries is expected at 4.1 percent in 2022, which represents a decrease of expectations by 0.5 percentage points.
In Egypt, growth is expected to reach 6.1 percent for the 2021-2022 fiscal year. This percentage is expected to decline to 4.8 percent in the 2022-2023 fiscal year, a decrease of 0.7 percentage points. The decline in tourism as a result of the Russian-Ukrainian war and the rise in food prices and energy insolvency leads to a weakening of domestic demand and pressure on the budget.
Lebanon is facing another year of decline amid increasing poverty, eroding inflation, and disruption of basic services. It is expected that the real gross domestic product will grow for the fourth consecutive year to 6.5 percent.
