High oil prices to power Gulf economies amid inflation risks

High oil prices to power Gulf economies amid inflation risks

The Gulf Cooperation Council’s (GCC) economic growth will accelerate this year to a pace not seen in a decade, according to a Reuters poll of economists, who said high inflation and a slowing global economy were the biggest downside risks.

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Crude prices, a major driver for Gulf economies, shot up after Russia invaded Ukraine in February and have remained elevated, giving a major boost to economies in the oil and gas-rich region.

An April 12-22 Reuters poll predicted growth overall in the six GCC economies would average 5.9 percent this year, which would be the fastest since 2012.

“GCC economies have seen a relatively strong start to 2022. The hydrocarbons sectors have benefited from increased oil production so far this year, with crude oil production up 12 percent on Q1 2021 for the UAE and 19 percent over the same period for Saudi Arabia,” said Khtija Haque, chief economist at Emirates NBD.

“Survey data for the first quarter of the year point to a solid expansion in non-oil sectors as well, with strong growth in business activity and new work in the UAE, Saudi Arabia, and Qatar.”

For Saudi Arabia, the region’s