CAIRO: The Middle East and North African region’s economy is set to grow 5.5 percent this year, in what would be its fastest rate since 2016, according to a World Bank report.
However, the same area is forecast to see growth fall to 3.5 percent in 2023.
As oil prices rise, the Gulf Cooperation Council countries are expected to witness a growth of 6.9 percent in 2022, which will then steady to 3.7 percent in the following year with the subsiding hydrocarbon prices.
The report identified Saudi Arabia as the primary driver of GCC growth, with a forecast 8.3 percent growth rate in 2022.
Non-oil sectors in the GCC region are also expected to witness growth to varying extents in the coming year — from 2.6 percent in Oman to 7.7 percent in Kuwait.
Among developing oil exporters, economists anticipated a moderate growth of 4.1 percent this year, with Iraq leading the pack at a growth rate of 8.2 percent.
However, Iraq’s non-oil gross domestic product growth between 2022 and 2024 is set to be less than 3 percent due to political instability and water and electricity shortages.
Algeria’s GDP growth is forecast to reach 3.7 percent by the end of this year, aided by European efforts to diversify energy sources. In comparison, Iran’s expected growth was recorded at 2.9 percent, limited by global economic sanctions.
World Bank economists averaged the developing oil exporters’ growth at 2.7 percent in 2023 as the hydrocarbon high subsides.
The report further said that developing oil importers are projected to grow by 4.5 percent in 2022, led by Egypt’s 6.6 percent growth by the end of its fiscal year in June.
Despite the country’s progress in tourism, telecom and gas exports, Egypt’s GDP is expected to drop significantly to 4.8 percent in 2023.
Jordan’s GDP growth should fall slightly to 2.1 percent in 2022 and up to 2.3 percent the following year, also supported by tourism, according to the report.
Apart from Egypt and Lebanon, the oil exporting countries are said to grow by only 0.7 percent this year and then slightly up to 2.5 percent in 2023.
The report pointed out that six of the 18 MENA countries will have recovered from pre-pandemic GDP growth levels in 2022, and three additional countries will catch up the following year.
The current account of the MENA region is expected to advance notably in 2022 to reach 10.5 percent of GDP compared to only 4.5 percent the year before.
The region’s fiscal balance is said to reach 1.9 percent of GDP, up from a deficit of 3.5 percent in 2021, stated the World Bank report.
Gulf countries’ current account alone is projected to reach 17.2 percent in 2022 and 14.6 percent the following year, while their fiscal balance will touch 5.3 percent in 2022, up from a deficit of 2.2 percent the year before.