GCC economies to bounce back in 2022: MUFG Research
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GCC economies to bounce back in 2022: MUFG Research

GCC economies to bounce back in 2022: MUFG Research

Forecast shows GDP to grow at 6.1 per cent this year; with the GCC surplus to reach $27bn

GDP growth in the GCC countries will see a rise of 6.1 per cent in 2022, on the back of higher oil prices, increased oil production and strong momentum in non-oil activity, according to the findings of MUFG Research, a part of the MFUG financial group.

Ehsan Khoman, head of MUFG’s EMEA Emerging Markets Research team, said: “The GCC 2022 outlook is markedly skewed to the upside this year. The robust vaccination programme, ongoing reopenings and higher oil prices as well as production, is spurring a real GDP growth forward in the region.

“Following several years of having fiscal deficits, the GCC will rebuild its buffers in 2022. Higher government revenues and the rationalisation of expenditure in 2022 budgets will strengthen the countries’ balance sheets and offer greater fiscal capacity to navigate towards a post-pandemic equilibrium.”

This, according to MUFG Research, will lead to an aggregate GCC fiscal surplus in 2022 of $27bn, the first since 2014.

The oil surge and austerity measures will support sovereign balance sheets, with the GCC’s financing needs remaining limited at only $2.8bn in 2022, and its debt capital markets’ needs at only $4.8bn.

According to the outlook, economic growth in the GCC will also outperform all its emerging markets’ peers in 2022 except Asia, with Saudi and the UAE leading this recovery, given their recovery from non-oil GDP, a rebound in their domestic demand and their higher investment levels in line with national vision strategies.

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