The Gulf economies suffered in 2020. That’s true for the rest of the world too. How soon will the Gulf countries recover from the recession wrought by the perfect storm of the COVID-19 outbreak, sustained low oil prices and geopolitical challenges?
This is the first of a four-part series on the health of the Gulf economy.
What’s IMF's 2021 outlook?
Sound policies and robust reserves are keeping GCC economies resilient. Most of them are on the recovery path. But a complete turnaround will be slow. That’s what economists, rating agencies, multi-lateral agencies, and global think tanks say, citing international and domestic economic conditions.
The International Monetary Fund’s (IMF) forecast for 2021 and the year ahead are not very encouraging. It expects the GCC’s GDP growth to return to the 2019 level only in 2023. IMF’s latest World Economic Outlook published in January has no new forecast for the region except Saudi Arabia.
GCC’s largest economy, Saudi Arabia, is expected to record a 2.6 per cent growth in 2021. Last year’s estimated contraction has been revised upwards to 3.9 per cent from the October projection of 5.4 per cent contraction. Saudi growth is likely to be faster in 2022 at 4 per cent.
Since the 2021 outlook update does not include forecasts on the UAE and other Gulf countries, the October outlook stands good. The conservative estimates are the result of low oil prices, COVID-19 fallout and conflicts in the region.
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