Qatar’s economy is expected to grow 4.8% this year and 4.9% in 2023, the World Bank has said in its latest forecast.
Qatar’s GDP growth next year will be the GCC’s best, the forecast has shown.
In 2023, Bahrain's economy has been forecast to grow at 2.9%, Kuwait (3%), Oman (4.1%), Saudi Arabia (2.3%) and UAE (2.9%).
Overall, the growth in Middle East and North Africa (Mena) region is expected to accelerate to 4.4% in 2022, an upward revision from June 2021 and moderate to 3.4 percent in 2023, World Bank said.
The gap in average per capita income between Mena and advanced economies is projected to widen during the forecast horizon, however.
Higher oil and natural gas prices and increased production are expected to benefit energy exporters. Saudi Arabia's oil sector is expected to rebound strongly, boosting exports, while non-oil activity should benefit from high vaccination rates and accelerating investment.
In Iraq, output is expected to expand by 7.3% in 2022 led by the oil sector. The growth rate in Iran in 2022 has been revised upward due to a gradual recovery in the oil sector and the easing of Covid-19 mobility restrictions.
The short-term outlook has also improved for oil importers, the World Bank noted.
In Egypt, output is expected to grow by 5.5% in the fiscal year ending June 2022, because of improved external demand from major trading partners, an expansion of the information and communications technology and gas extractives sectors, and gradual improvements in tourism.
In Morocco, however, the economy is expected to grow by 3.2% in 2022, a slower pace than projected in June 2021, as agricultural output slows.
Further Covid-19 outbreaks, social unrest, high debt in some economies, and conflict could undermine economic activity in Mena.
With less than two-fifths of the population of Mena fully vaccinated, concentrated in the region’s high-income economies, economic disruptions related to the pandemic remain a major risk, the World Bank noted.
Changes to oil prices could undermine activity in the region with gains and losses accruing differently to oil importers and exporters. Underinvestment in the sector may limit the ability of oil exporters to take advantage of high oil prices.
The rapid spread of Omicron may undermine global demand and lead to a retrenchment in oil prices. The increasing frequency of natural disasters linked to climate change threatens to undermine lives and livelihoods in Mena.
Over time, rising temperatures would reduce growing areas for agriculture and yields and exacerbate already-scarce water resources, undermining food security, forcing migration, lowering labour productivity, and raising the likelihood of conflict, it said.
According to the World Bank, the Mena region experienced a strong economic recovery in the second half of 2021 bringing output back to its pre-pandemic level in some economies. The economic performance has been uneven across the region because of differences in the severity and effects of the pandemic, the World Bank noted.