RIYADH: Saudi Arabia’s economy is expected to grow 7 percent in 2022, ahead of other countries in the Gulf Cooperation Counil, according to the Global Economic Update report by the World Bank.
According to the report, the Kingdom’s growth in 2022 will be driven by stronger oil output following OPEC+ production cuts and continued growth in non-oil sectors, supported by stronger consumption, increased tourism, and higher domestic capital spending. The report forecasts a combined growth of 5.9 percent in the GCC countries altogether, driven by the hydrocarbon and non-hydrocarbon sectors.
The World Bank report added that the GCC economies are strongly rebounding after the COVID-19 pandemic, which is primarily accelerated by a massive vaccination rollout, ease in restrictions and developments in the hydrocarbon market.
It said Bahrain’s economy will be accelerated 3.5 percent this year due to surging oil prices, while Kuwait will witness a growth of 5.9 percent.
Oman’s economy will grow by 5.6 percent this year, followed by followed by Qatar and the UAE at 4.9 percent and 4.7 percent respectively.
The World Bank also noted that the ongoing tensions between Ukraine and Russia have resulted in changes in the energy market, which will ultimately benefit the GCC countries.
“As major hydrocarbon exporters, the GCC countries may also benefit from changes in the energy markets brought about by the war in Ukraine. These countries may see strong fiscal and external surpluses, which could help spur consumer confidence and investments,” it said.
The Global Economic Update report also outlined the challenges the Gulf countries will face as they work toward a sustainable future.
Issam Abousleiman, World Bank’s regional director for the GCC, said: “As GCC countries commit to the net-zero objectives laid out in their pledges and strategies, it is important to restructure energy and water subsidies and address the GCC’s challenge of moving to a more sustainable growth model less hydrocarbon dependent and managing the transition to a global low-carbon economic environment that risk to see their oil revenues reduced in the next few decades.”