According to the Seventeenth Edition of the Arab Economic Outlook Report (AEOR), published by the Arab Monetary Fund, the expected economic growth rate for the Arab countries will increase to 5.4 percent in 2022 as a result of rising oil prices, an increase in production in Arab oil-exporting countries, and the continuation of reforms that foster growth (AMF).
The AEOR highlighted that due to regional and international inflationary pressures, Arab countries are anticipated to experience rather high inflation rates in 2022.
The report indicates that the global economy is facing difficulties related to the global supply chains and high commodity prices, which raise concerns about the security of the world’s food supply. It also includes macroeconomic forecasts, growth, and inflation forecasts for the Arab economies for 2022 and 2023.
International organizations have thus lowered their projections for world economic growth made in January 2022.
The influence of recent global developments on Arab economies, macroeconomic policies, and the continuation of financial packages and their impact on containing the effects of COVID-19 are expected to have a significant impact on the growth pathways in Arab countries throughout 2022 and 2023.
Arab nations that export oil will profit throughout 2022 from the “OPEC+” agreement’s enhanced oil production levels and relatively higher oil and gas prices on global markets, which will encourage government expenditure to spur economic growth.
Thanks to a number of factors, such as the recovery from the COVID-19 pandemic, economic reforms, and the continued adoption of stimulus packages, the GCC countries are expected to experience relatively high growth rates of 6.3 percent in 2022, compared to 3.1 percent in 2021, while 2023 will see a decline to 3.7 percent in economic growth.
Other Arab oil exporters will gain from higher production levels under the OPEC+ agreement as well as an increase in world oil prices to boost their growth rates. It follows that they will accomplish 4.6 percent in 2022, which is higher than 3.1 percent in 2021.
However, because of difficulties in the business environment, their growth rate will drop to 3.9 percent the following year.
The AMF anticipates that in some Arab nations in 2022, inflation rates would reach reasonably high levels as a result of factors such as rising food and energy prices as well as mounting inflationary pressures.
In some nations, changes in agricultural productivity brought on by climate change will also impact market prices.
Thus, it is anticipated that the inflation rate in Arab nations will be 7.6% in 2022 and 7.1% in 2023
News Source: Emirates News Agency
