Saudi Arabia’s economy, the largest in the Middle East, is expected will grow 2.9 percent this year, up from the 2.6 percent forecast in January; the IMF said in its latest World Economic Outlook, released this week.
In its monthly report, the IMF said it expects the Saudi economy; to recover up to 0.3 percent from estimates predicted in January.
In February, it expected Saudi Arabia’s real GDP to grow 2.6 percent this year. It confirmed its expectations for its economy to grow 4 percent in 2022.
The forecast for the GDP growth comes after the kingdom’s economy contracted 4.1 percent last year; due to the twin shock of the COVID-19 pandemic and lower oil prices.
Apart from Saudi Arabia, the global financial institution expects most Gulf economies to recover this year at a faster pace than previously estimated.
The United Arab Emirates, the Gulf’s second-largest economy; will see a growth of 3.1 percent this year, rebounding from a 5.9 percent contraction in 2020, the IMF said. In October last year, it had forecast a 6.6 percent drop in 2020 and 1.3 percent growth this year.
Oman also saw the biggest positive revision of the Gulf countries, from expectations of a 0.5 percent contraction this year to a forecast of 1.8 percent growth.
Bahrain’s economy will also grow 3.3 percent this year versus a forecast of 2.3 percent in October. Forecasts for Kuwait and Qatar remained almost unchanged, with Kuwait expected to post 0.7 percent growth this year; up from an October estimate of 0.6 percent.
Qatar’s economy can grow 2.4 percent, just below the previous 2.5 percent estimate.
The countries in the region markedly acted quickly and decisively in response to COVID-19 which helped control the damage.
“The immediate actions countries in the region took as COVID-19 also began sweeping the globe helped save lives,” said Jihad Azour, director of the IMF’s Middle East and Central Asia Department. “Ensuring health systems; are strong and well-resourced remains essential as countries consider what kind of economies they want to build for the future. The IMF will work with countries; to help facilitate the economic recovery and aid the millions of people whose livelihoods have suffered in the pandemic’s wake.”
The necessary containment measures, implemented to slow the pandemic’s spread, together with lower global demand have had a significant impact on economic activity.