RIYADH: Economists predicted on Tuesday that Saudi Arabia’s economy would grow by 6.3 percent in 2022, an increase on their 5.7 percent forecast three months ago and the fastest growth since 2011.
Economic growth in the six Gulf states will average 5.9 percent this year, the fastest since 2012, according to economic analysts polled by the Reuters news agency.
The expected growth in Kuwait at 6.4 percent, and in the UAE at 5.6 percent, would be the fastest in about a decade.
Qatar, Oman, and Bahrain are expected to grow around 4 percent, also the fastest in several years.
“GCC economies have seen a relatively strong start to 2022. The hydrocarbons sectors have benefited from increased oil production so far this year, with crude oil production up 12 percent for the UAE and 19 percent for Saudi Arabia,” said Khatija Haque, chief economist at Emirates NBD.
“Survey data for the first quarter of the year point to a solid expansion in non-oil sectors as well, with strong growth in business activity and new work in the UAE, Saudi Arabia, and Qatar.”
However, the economists sounded a note of caution on the threat of inflation.
Although modest in comparison to many other countries, GCC inflation is expected to rise above 2 percent this year, with the highest median forecast for Qatar at 3.5 percent, and the lowest for Saudi Arabia at 2.5 percent.
“In the face of higher commodity and global food prices, we have revised our 2022 inflation forecast for the GCC region to be about 3.5 percent from around 2.5 percent,” said Ilker Domac, regional head of economics at Citi.
“Since GCC countries import 85 percent of their food, a sustained upward pressure on international food prices could pose a challenge for policymakers.”