Arab economies are expected to grow by 5% in 2022, supported by the increase in oil production and its prices in international markets and the continuation of stimulus packages to support economic recovery, said the Arab Monetary Fund (AMF) in a new report.
In 2023, the growth of Arab countries is expected to decrease to 4% due to the decline in global demand, the gradual withdrawal of stimulus packages, and the anticipated fall in commodity prices, according to the 16th edition of the Arab Economic Outlook Report Including Macroeconomic Forecasts for Arab Economies for 2022 and 2023.
The expected growth rate for 2022 reflects the rise in the growth rate of the Arab oil-exporting economies to 5.6% due to the anticipated increases in the output of the oil and gas sectors.
On the other hand, the growth rate of the Arab oil-importing economies is expected to reach a moderate level of 3.7%, reflecting the challenges facing their internal and external balances, which affect consumption and investment levels.
In this context, a significant increase in the GCC Growth Rate is expected to reach about 5.8% in 2022, compared to 3.1% for the growth rate recorded in 2021, due to many supportive factors that will stimulate the output of both oil and non-oil sector.
These factors include the positive momentum of the economic reforms applied to increase levels of economic diversification and attract local and foreign direct and the positive impact of the stimulus packages to support recovery from the Covid-19 Pandemic. In 2023, the growth pace of the GCC countries is expected to decline to 3.6%.
Other Arab oil-exporting countries are expected to benefit from the planned increases in oil production quantities within the framework of the Opec+ agreement and the rise in the global oil and gas prices, bringing the group's growth rate to 4.6% in 2022, compared to 3.30% in 2021, while the growth rate is expected to decline to 3.9% next year due to the internal conditions that impact growth and the challenges facing this group of countries in terms of supporting business environments and increasing its attractiveness.
In contrast, Arab oil-importing countries are expected to record a moderate growth pace in 2022, estimated at 3.7% compared to 2.5% in 2021, reflecting challenges facing internal and external imbalances due to the global economic environment.
A significant improvement in the growth rate of this group of countries is expected in 2023 to reach 5%, which is attributed to the improvement in aggregate demand and a gradual easing of pressures facing public budgets and balances of payments as a result of the expected decline in commodity prices next year.
The inflation rate is expected to rise in the Arab countries as a group to record about 7.5% in 2022, compared to 5.7% in 2021, while a relative decline in the inflation rate is expected in 2023 to reach 7.0%. The increase in inflation rates reflects the impact of international supply chains’ challenges and the recorded rises in agricultural and industrial commodities and energy products prices because of the current global developments.
Tightening will dominate monetary policy stance in many Arab countries over the forecast horizon to maintain the stability of exchange rate regimes and curb inflationary pressures.
The deficit of the consolidated public budget of Arab countries as a group is expected to decrease to reach 2.4% of GDP in 2022 due to the anticipated increase in oil revenues, and the achieved surplus in the GCC public budget for the first time since 2014 .
The current account of the Arab countries as a group is expected to achieve a surplus in 2022 to reach about $186.6 billion, equivalent to about 6.4% of the GDP, due to the increase in export receipts and interest income. – TradeArabia News Service
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