Gulf economies to accelerate faster in 2022 but wild swings in oil prices pose threat

The economic growth of six-member GCC (Gulf Cooperation Council) will accelerate by the steepest pace in several years on 2022

by Sourav D
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Gulf economies to accelerate faster in 2022 but wild swings in oil prices pose threat

The economic growth of six-member GCC (Gulf Cooperation Council) will accelerate by the steepest pace in several years on 2022, an analysts’ poll comprising of 25 economists, hedge fund managers and industry experts unveils on Monday.

On the flipside of the coin, since the latest growth forecast about GCC economies comes against the backdrop of a swift upside momentum in crude oil prices, the poll participants had underscored that a plunge in crude oil futures’ prices could darken the outlook up to some extent.

In factuality, crude oil prices, a critical indicator to Gulf economies’ growth, soared to their highest level since 2014 later last week, mostly riding on the back of an exacerbation in geopolitical tensions involving UAE and Ukraine, while a latest nationwide protest in Kazakhstan, the most resource-rich former Soviet Union state, had sparked up oil prices further apart from growing outages in Libya.

Aside from that, a latest attack on an oil facility in Abu Dhabi by Houthis alongside a retaliation from Saudi on Yemeni capital and a blazing Ukraine issue had been spurring up oil prices. A sustenance of such geo-political turbulences could occlude oil outputs deep into the year.

GCC economies to accelerate at a faster pace in 2022

According to an analysts’ poll in which all 25 participants had forecasted an acceleration in economic growth in GCC economies this year, OPEC-kingpin Saudi Arabia’s economy is expected to grow by 5.7 per cent, the highest among all, while Kuwait and UAE are forecasted to expand by 5.3 per cent and 4.8 per cent respectively.

Economic growth in Qatar, Bahrain and Oman is projected to average between 3 per cent and 4 per cent. Meanwhile, addressing to a brighter economic outlook for GCC nations in 2022, the head of research and chief economist at Emirates NBD, Khatija Haque said, “Despite relatively tight fiscal policy, and some external headwinds, we expect the GCC economies to see faster growth in 2022 as they continue to build on the progress made last year”.

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