Regional outlook remains positive: Report

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Regional outlook remains positive: Report

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Muscat: A positive regional outlook has been revealed despite a significant downgrade in global gross domestic product (GDP) growth against a backdrop of rising inflation and interest rates in a new report.

“Middle East GDP growth in 2022 is now projected at 5.5 per cent, slightly up on Oxford Economics' forecast three months ago,” according to the latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics.

According to the third quarter (Q3) report, the positive Middle East outlook is underpinned by solid projections for activity in Gulf Cooperation Council (GCC) economies.

“GCC GDP is expected to grow by 6.7 per cent this year, the fastest rate since 2011, driven by higher oil production, the recycling of government revenues into investment initiatives and, to a lesser extent, household and business spending. However, the possibility of a global recession limiting oil demand remains a key downside risk to this view,” the report further stated.

Although oil prices are expected to average $103.8 per barrel, easing from the second quarter (Q2) average of $113.5 per barrel, they remain supportive of public finances and are expected to contribute to an overall budget surplus of 9.7 per cent of GDP for the