GCC to post 6.7% GDP growth despite oil price easing

GCC to post 6.7% GDP growth despite oil price easing

Oil continues to buffer GCC economies despite the easing of prices with countries in the region expected to report a surplus of 9.7 per cent of their combined gross domestic product in 2022, driving a decline in their debt-to-GDP ratios while posting a GDP growth of 6.7 per cent, the fastest since 2011.

While mounting recession fears across the globe pose a downside risk to the GCC outlook, most economies in the GCC retain plenty of fiscal headroom, with fiscal breakeven oil prices remain below $80 barrels per day (bpd) in all member countries except Bahrain, suggesting economic growth across the region will remain supported in the coming quarters, analysts observed in ICAEW Economic Update.

The analysts at the Institute of Chartered Accountants in England and Wales (ICAEW), revised their 2022 oil price projection downwards to $103.8bpd, against their forecast of $112bpd three months ago, while warning that a positive resolution to Iran nuclear deal negotiations could see oil prices fall further. Oil prices have been trending down since the beginning of June and Brent crude prices now stand below $100bpd.

In the face of mounting risks to global demand, the Opec+ alliance decided to lower the group’s oil production target for October