Kuwait Business: Energy prices to further boost GCC economic growth: KPMG – Gulf Digital News

Kuwait Business: Energy prices to further boost GCC economic growth: KPMG – Gulf Digital News

The oil and gas prices are expected to continue soaring in 2022 and 2023, driven by their increased production and hike in prices, driving the economic activity in the GCC countries to pick up further pace, a report said.

These trends are likely to support the growth in oil and non-oil sectors, and point toward the dip in unemployment rates, according to KPMG’s Global Economic Outlook H1 2022

Although the average annual inflation is forecast to be restricted in the 2022–23 period, upward price pressures are likely to be propelled by Covid-19-related supply chain disruptions. The GCC governments’ supply chain management strategies, together with the extensive use of foreign labour, exchange rate peg with the US dollar, and the GCC fiscal positions emerging from towering international energy prices, are likely to dampen the impact of any potential negative economic shock.

Despite the diversity in their economic growth potential, many of the non-GCC countries are subject to risks such as weak fiscal and balance of payments positions, volatile and limited economic growth rates, and low resiliency toward economic shocks. It is assumed that additional lockdown measures will be limited for the group and its trading parties.

Following the economic disruption led by Covid-19 containment measures,