UAE Business: GCC GDP to grow by 6.7pc, the fastest rate since 2011: ICAEW – Gulf Digital News

UAE Business: GCC GDP to grow by 6.7pc, the fastest rate since 2011: ICAEW – Gulf Digital News

GCC GDP is expected to grow by 6.7% 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.

Meanwhile, with a positive regional outlook despite a significant downgrade in global GDP growth against the backdrop of rising inflation and interest rates, Middle East GDP growth in 2022 is now projected at 5.5%.

This is slightly up on Oxford Economics' forecast three months ago, said the latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics.

According to the Q3 report, the positive Middle East outlook is underpinned by solid projections for activity in GCC economies.

Oil prices contribution

Although oil prices are expected to average $103.8pb, easing from the Q2 average of $113.5PB, they remain supportive of public finances and are expected to contribute to an overall budget surplus of 9.7% of GDP for the GCC region, the widest since 2012.

This should drive a decline in the debt-to-GDP ratios since much of the GCC retains plenty of fiscal headroom. Fiscal breakeven prices