Experts anticipate that economic development in the Middle East will be faster in 2022 than forecast by the International Monetary Fund (IMF).
While the IMF expects the Mena area to expand at a rate of 4.1 percent in both 2021 and 2022, experts at ICAEW and PwC believe it will grow at a quicker rate. They think that following a 3.0% expansion this year, the region’s economic growth would increase to 4.4 percent in 2022.
As business optimism rises, the GCC’s GDP is expected to return to pre-pandemic levels in Q1 2022, with GDP growth rising from 2.7 percent this year to 5.0 percent in 2022. The appearance of the Omicron variety poses a threat to the world economy. However, the Middle East has a very high vaccination coverage, particularly in the Gulf, which ICAEW researchers predict would restrict the need for additional tight control measures.
As producers boost capacity, the oil sector, which is already benefiting from greater production quotas, will remain an important economic development engine through 2022. Brent oil prices have dropped below $80 per barrel, as high Covid-19 numbers in Europe and additional limitations have prompted concerns about demand levels. Brent will average $72.5 per barrel in 2022, according to the research. The rise in oil prices to their highest level since 2014, as well as the tapering of Opec+ production cutbacks, are also assisting in the rehabilitation of state finances, with the IMF predicting that the GCC would return to fiscal balance in 2023, for the first time since 2014. Even Oman, which had a substantial structural deficit before to Covid-19, is forecast to return to surplus in 2022 because of major reforms and a higher oil price.
The rise in oil prices to their highest level since 2014, as well as the tapering of Opec+ production cutbacks, are also assisting in the rehabilitation of state finances, with the IMF predicting that the GCC would return to fiscal balance in 2023, for the first time since 2014. Even Oman, which had a substantial structural deficit before to Covid-19, is forecast to return to surplus in 2022 because of major reforms and a higher oil price.