GCC Economies to Expand by 5.9% in 2022; World Bank

The international financial institution, World Bank has revealed that the economies of the Gulf Cooperation Council (GCC) are projected to expand by 5.9 percent overall in 2022, with this recovery likely to continue in the long term, driven by the hydrocarbon and non-hydrocarbon sectors.

The latest issue of the World Bank’s Gulf Economic Update (GEU), “Achieving Climate Change Pledges,” describes them as rebounding robustly from the COVID-19 pandemic in 2021 and at the beginning of 2022.

According to the statement, the recovery was driven by the widespread vaccination rollout across the GCC, the relaxation of pandemic restrictions, and developments in the hydrocarbon market. Further, the fiscal deficits have markedly improved, with the GCC external balance reaching pre-pandemic levels in 2021 as energy prices and export earnings strengthened.

As major hydrocarbon exporters, GCC countries may also benefit from changes in the energy markets brought about by the war in Ukraine. These countries may see strong fiscal and external surpluses, which could help spur consumer confidence and investments.

“As GCC countries commit to the net-zero objectives laid out in their pledges and strategies, it is important to restructure energy and water subsidies and address the GCC’s challenge of moving to a more sustainable growth model less hydrocarbon dependent and managing the transition to a global low-carbon economic environment that risk to see their oil revenues reduced in the next few decades.”

Issam Abousleiman
Regional Director – GCC
World Bank