Rapid vaccine roll-out, oil to support Gulf economies

Rapid vaccine roll-out, oil to support Gulf economies

A rapid roll-out of COVID-19 vaccines, along with rising oil production and higher oil prices, will support a quick recovery this year in the Gulf economies, said London-based consultancy, Capital Economics.But other parts of the Middle East and North Africa (MENA) are likely to take longer to recover their lost ground amid a slower roll-out of vaccines and tight fiscal policy.The UAE's vaccination programme has got off to a strong start and, if this continues, it should allow for restrictions to be lifted in Q2. Combined with stronger oil output and the hosting of the World Expo, this will support a robust recovery this year. But concerns over Dubai's corporate debts are unlikely to fade.The recovery in Saudi Arabia's economy will continue over the course of this year. But with oil output being ramped up only gradually and fiscal policy to remain tight, the recovery is likely to be slower than in the other Gulf states.Egypt's economic recovery will be boosted by the recovery in the global economy, but ongoing restrictions will weigh on domestic demand. Rising inflation will prevent interest rate cuts over the next few quarters, but we hold a non-consensus view that the central bank will ease