New forecasts place the Gulf among the world’s top 10 economies | Atalayar

The coronavirus pandemic, the food and energy aftermath of the war in Ukraine, the effects of climate change, a new and progressive polarization of the international community… In the last two years, the world has successively become a seemingly endless series of events that have slowed economic growth. Forecasts from the World Bank and International Monetary Fund (IMF) have been revised month by month and are looking increasingly gloomy for most countries around the world.

“World trade growth in 2022 and 2023 is likely to slow more than originally expected due to lower global demand and supply chain issues,” according to the latest update of the IMF’s World Economic Outlook.

In this scenario, however, a small group of powers have managed to dodge the economic fallout of all these setbacks – at least at the macro level. Saudi Arabia, Bahrain, United Arab Emirates, Kuwait, Oman and Qatarthe six countries of the Arabian Peninsula on the west coast of the Persian Gulf, belong to.

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REUTERS/John P Christo – Logo of the International Monetary Fund (IMF)

According to estimates by international economic institutes, the Gulf States will reach a GDP (gross domestic product) of 2.1 billion dollars by the end of 2022. That is 25% more than in the previous year – at that time it was around 1.68 billion – and which would surpass Italy’s GDP, which was previously ninth in the ranking of the world’s ten largest economies.

Although the list consists of countries many times larger than the Arabian Peninsula – such as the United States and China – this should be noted The entry of the six Arab countries in the top 10 is based on the GDP of the entire bloc. In this way, the Gulf would leave countries like Russia, Brazil and South Korea behind the US, China, Japan, Germany, Great Britain, India, France and Canada.

Saudi Arabia ($1.04 billion), United Arab Emirates ($501.4 million), Qatar ($225.7 million), Kuwait ($186.6 million), Oman ($110.1 million) and Bahrain ($44.2 million) are expected in that order 2% of the world economy.

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PHOTO/ATALAYAR – Infographic of the share of each Gulf economy (Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain) in the region’s total wealth in 2022

Oil from the Gulf

In 2020, the Gulf was the thirteenth largest economy in the world. Just two years later, the block is already in ninth place. A leap of four places which, to make matters worse, has taken place in the midst of countless international crises.

What factors are responsible for this strong economic growth? None other than the production and export of oil and other hydrocarbons to the rest of the world. The six oil-producing Gulf giants, as well as many of their neighbors in the Middle East and North Africa, have benefited enormously from soaring oil and gas prices – since early last year – and increased demand late last year, following Covid-19 containment and restrictions and disruption to supplies from Russia due to sanctions. This was reflected in the large tax surpluses in Persian households.

REUTERS/Maxim Shemetov – file photo. Saudi Aramco oil facilities in Abqaiq, Saudi Arabia, October 2019

Riyadh’s weight

Saudi Arabia, the Wahhabi oil giant, is undoubtedly the big leader of this growth. Surpassed $1 billion in GDP for the first time in its history, The kingdom’s economy will account for nearly half of the entire bloc’s wealth by 2022. About 49.3%. This amount will be used to take action to reduce its reliance on oil revenues, diversify its revenue streams and support private sector initiatives.

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But according to the rating agency Moody’s, the economy of Saudi Arabia, like that of the other Gulf States, True financial diversification is still a long way off.

PHOTO/REUTERS – The Central Bank of Qatar in Doha

Qatari swing

At the same time, the state of Qatar – although not as important economically as its Saudi neighbor – has become one of the fastest growing countries. it is not only its gas potential – key to replacing Russian supplies – which is fundamental to boosting its revenues, but also its role as host of the World Cup. A winning combination that has given him a real and growing influence both regionally and internationally.

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