Rise in tourism, oil output to lift Saudi economy by 7% in 2022, outpacing other GCC nations: report

Published: May 25, 2022
Updated: May 25, 2022
tourism, oil output to lift Saudi economy by 7% in 2022

Saudi Arabia’s GDP would increase by 7 percent if tourism and oil production were combined.

According to the World Bank research, the GCC’s economic recovery is due to the region’s widespread vaccination rollout, the relaxing of pandemic restrictions, and changes in the hydrocarbon market.

According to the latest World Bank estimate, Saudi Arabia’s GDP is predicted to increase by 7% in 2022, mainly due to higher oil output following OPEC+ production curbs and ongoing expansion in non-oil sectors.

Stronger consumption, increased tourism, and higher domestic capital investment will all help the kingdom’s economy thrive, according to the World Bank’s Gulf Economic Update (GEU), “Achieving Climate Change Pledges.”

Saudi Arabia‘s predicted rate of growth outpaces that of the other Gulf Cooperation Council (GCC) countries, which are expected to rise by 5.9% total in 2022.

“As GCC countries commit to the net-zero goals outlined in their pledges and strategies, it is critical to restructure energy and water subsidies and address the GCC’s challenge of transitioning to a more sustainable growth model that is less hydrocarbon dependent and managing the transition to a global low-carbon economic environment,” Issam Abousleiman, the World Bank’s regional director for the GCC, said.

GCC countries’ economic prospects: World Bank Group

tourism, oil output to lift Saudi economy by 7% in 2022

Bahrain: Bahrain’s GDP is predicted to grow by 3.5 percent in 2022, thanks to rising energy prices. The expansion of the transportation and communication sectors, as well as increasing agriculture and fisheries, will fuel recovery in the non-oil economy.

Kuwait: Due to rising oil output as OPEC+ restrictions are phased out and local demand improves, economic growth is predicted to accelerate to 5.7 percent in 2022.

Oman: Growth is expected to reach 5.6 percent in 2022, with the hydrocarbon sector growing at more than 8%, while the non-oil economy continues to develop at more than 2% as speedier vaccination distribution boosts domestic activity.

Qatar: Real GDP is expected to rise to 4.9 percent in 2022 as a result of increased hydrocarbon exports, while private consumption growth is expected to be somewhat lower, at 4.8 percent, due to the dilution of World Cup proceeds and higher prices.

tourism, oil output to lift Saudi economy by 7% in 2022

United Arab Emirates: The UAE’s economic recovery is expected to continue in 2022, with oil and non-oil sectors driving the growth of 4.7 percent.

The hydrocarbon and non-hydrocarbon industries are projected to fuel the GCC’s economic recovery in the medium term.

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After the Covid epidemic, the economy began to recover.

According to the most recent issue, the GCC countries will recover quickly from the Covid-19 pandemic in 2021 and early 2022.

The resurgence is attributed to a generally successful vaccination rollout across the GCC, the relaxation of pandemic restrictions, and changes in the hydrocarbon market, according to the research.

As a result, fiscal deficits have decreased significantly, with the GCC external balance improving to pre-pandemic levels in 2021 as energy prices and export profits increased.

GCC countries, as significant hydrocarbon exporters, may gain from changes in the energy markets caused by the Ukraine conflict.

Strong fiscal and external surpluses in these countries should help boost consumer confidence and investment.

However, the war has pushed energy security to the forefront of many major oil importers’ agendas, hastening their plans for a green development transition.

According to the World Bank report, the GEU features a particular chapter concentrating on essential actions that must be taken toward energy subsidies, fiscal reduction, and the significance of getting prices right to create an environment that puts the private sector at the forefront of green growth.

The GEU’s special chapter explores prospects to restructure energy subsidies in the region, as well as opportunities for GCC countries to diversify into green technology and become renewable energy powerhouses.

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