GCC economies seen rebounding in 2021, Saudi GDP to grow 4.3% in 2022: survey

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The six economies in the GCC are projected to rebound and grow by 2-3% this year, while the region's two largest economies, Saudi Arabia and the UAE, are expected to grow over 4% in 2022, the Reuters quarterly survey showed.

These forecasts follow the steep declines seen last year following the crash in oil prices and the impact of the COVID-19 pandemic. Meanwhile, analysts expected Saudi Arabia, the UAE and Kuwait to benefit from the OPEC+ deal agreed recently to boost oil production.

Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), said: "Our core assumption was that a longer-term deal would be secured, and we raise our 2022 forecasts on the back of the baseline adjustments, which will enable the UAE, Kuwait and Saudi Arabia to raise oil output and their global market share from May 2022."

The survey, which was carried out during the period July 5-26, estimated that Saudi Arabia's growth will stand at an average of 2.3% this year, a slight decrease from forecast of 2.4% in a similar survey conducted three months ago.

It also expects the Middle East's largest economy and world's largest oil exporter's gross domestic product (GDP) to grow by 4.3% in 2022, an upward revision of 100 basis points (bps). Growth for 2023 was revised up 30 bps to 3.3%.

The UAE's economy was expected to grow by 2.3% this year, unchanged from previous estimates, and by 4.2% and 3.4% in 2022 and 2023, respectively, as estimates were revised up 60 bps and 10 bps respectively, Reuters said.

According to the survey, forecasts for Kuwait's GDP growth during 2021 were raised by 60 bps to 2.4%, while growth forecasts for next year was increased by 110 bps to 4.6%. Growth was also seen 10 bps higher at 3.0% in 2023.

Growth forecasts for Qatar's economy during 2021 was slashed by 30 bps to 2.5%, while forecasts for next year was unchanged at 3.6% and down 40 bps to 2.7% for 2023.

Expectations for Oman's growth was revised up 20 bps to 2.1% for this year, up 10 bps to 3.3% next year and down 20 bps in 2023 to 2.2%.

Meanwhile, Bahrain's growth forecasts were unchanged for this year and next at 2.9%, while 2023 growth was seen 30 bps lower at 2.4%, the survey showed.

Earlier this month, the International Monetary Fund (IMF) said that Saudi Arabia’s economy is recovering well from the COVID-19 pandemic, expecting the non-oil economy to grow by 4.3% this year, according to Argaam's data.
 

Finance Minister Mohammed Al-Jadaan welcomed the IMF experts' hailing of the Kingdom's efforts to mitigate the economic and social impact of the pandemic.