DUBAI: Forecasts for financial recoveries within the six-member Gulf Cooperation Council in 2021 have been trimmed whereas expectations for gross home product declines final yr had been blended in a quarterly Reuters survey of analysts launched on Tuesday.
Economists within the Jan. 11-25 ballot maintained their views that the hydrocarbon-dependent area’s financial fortunes would flip round this yr after it was hammered by the pandemic and an historic slide within the value of the GCC’s fundamental commodity.
However development forecasts for 2021 had been minimize for all six international locations – to various levels – with the UAE, Kuwait and Oman’s GDP development projections scaled again probably the most. Anticipated development in Saudi Arabia and Qatar remained the GCC’s highest.
Saudi Arabia, the area’s largest economic system, is predicted to see GDP development of two.8 % this yr, down from 3.1 % anticipated three months in the past. The median forecast for its GDP contraction in 2020 improved to 4.4 % from 5.1 %. The economic system is predicted to develop 3.2 % subsequent yr and three.1 % in 2023.
“The restoration in Saudi Arabia’s economic system will proceed over the course of this yr. However with oil output being ramped up solely regularly and financial coverage to stay tight, the restoration is prone to be slower than within the different Gulf states,” Capital Economics mentioned in a analysis notice.
The economic system of the United Arab Emirates, which within the final month has seen its seven-day common COVID-19 each day circumstances almost triple, is predicted to develop 2.2 % this yr – minimize from 2.7 % development anticipated three months in the past.
GDP within the UAE, the area’s tourism and commerce hub, was seen shrinking 6.6 % final yr versus an October expectation of a 6.0 % decline. It’s anticipated to develop 3.5 % in 2022.
Resort occupancy and income per out there room (RevPAR) within the UAE rose considerably final month, ending a tough yr for the sector on a brighter notice – although they remained decrease than pre-pandemic ranges.
“With the vacation season over and journey restrictions since tightened in lots of international locations attributable to surging coronavirus circumstances, these excessive figures for resort occupancy and RevPAR are unlikely to be sustained in Q1 2021,” Emirates NBD, Dubai’s greatest lender, mentioned in a analysis notice.
“Relying on how shortly vaccines are rolled out, the outlook is brighter for H2 2021, significantly with Expo 2020 set to start out in October 2021.”
Median forecasts for Qatar anticipated 2.8 % development this yr, a slight lower from 3.0 % anticipated three months in the past. It’s prone to have shrunk 3.5 % in 2020, the smallest contraction within the Gulf and an enchancment from 4.0 % contraction forecast in October. It’s anticipated to develop 3.5 % in 2022.
Kuwait was anticipated to develop 2.2 % this yr, down from the earlier ballot’s projection of two.6 % development. It was seen having shrunk 7.3 % in 2020 and rising 2.7 % subsequent yr. In October, analysts anticipated Kuwait’s 2020 GDP to contract 6.3 %.
Oman and Bahrain, the area’s weakest economies, are anticipated to develop 2.1 % and a couple of.5 % this yr respectively versus forecasts of two.5 % and a couple of.6 % GDP development three months in the past. Their economies had been seen having contracted 5.3% % and 4.7 % respectively in 2020. Subsequent yr, Oman is predicted to develop 2.7 %
% and Bahrain 2.9 %.
“It can take one other 18 months earlier than GDP within the Gulf Cooperation Council international locations rises above its pre-crisis peak,” Oxford Economics mentioned in a analysis notice.
“The anticipated financial scarring from the twin shock of COVID-19 and low oil costs displays excessive dependence on oil, restricted scope for fiscal assist, challenges of expat-dominated workforces, the important thing function of journey and tourism within the economic system, and geopolitical dangers.”