Economic growth in Gulf states to escalate: IMF forecasts

Gulf economies may recover better this year than previously estimated, according to a recent World Economic Outlook report released by the International Monetary Fund (IMF) this week.

The report shows Saudi Arabian economy will boost by 2.9 percent from 2.6 percent this year, up from January's forecast. The largest GCC state had witnessed its economy fall by 4.1 percent last year due as the Covid-19 crisis took over global market along with fall in oil prices.

The IMF pointed the UAE's economy growth by 3.1 percent this year, recovering from a 5.9 percent contraction in 2020. Last October, it had forecasted 6.6 percent decline in 2020 and growth of 1.3 percent this year.

From an expected contraction of 0.5 percent this year to a growth of 1.8 percent, Oman saw the biggest positive variation among the Gulf states in less than 3 months.

Bahrain's economy is expected to grow by 3.3 percent this year when compared with a 2.3 percent growth in the October forecast. Kuwait and Qatar did not make much differences with Kuwait showing a slight increase from 0.6 percent to 0.7 percent this year. Qatar's economy is expected to grow 2.4 percent, going down a tad from the previous estimate of 2.5 percent growth.

The world economy is expected to escalate 6 percent from 5.5 percent projected in January, with China and the US contributing the most. IMF estimated growth rates for the Middle East and Central Asia in 2021 and 2022 at 3.7 and 3.8 percent respectively.

According to the IMF, extraordinary public outlay to combat the Covid-19 pandemic, especially in the United States, would drive global growth to six percent this year.

"The immediate actions countries in the region took as COVID-19 began sweeping the globe helped save lives. Ensuring health systems are strong and well-resourced remains essential as countries consider what kind of economies they want to build for the future," said Jihad Azour, director of the IMF's Middle East and Central Asia Department.