Join us for our ‘Meet the Ambassadors’ series as we look at the Middle East. With great infrastructure project opportunities and a concerted effort to move away from over-reliance to oil and gas, the British Ambassadors from the region will share key insights on some of the attractive opportunities for UK plc, provide updates on political and economic issues as well as progress on the region’s response to the crisis.
In April the IMF republished their growth forecast for the Middle East, moving the growth prediction up to 4% for 2021. Constrained oil production levels will continue to put a ceiling on total economic growth while also masking the strength of the expected rebound in the non-oil economy and the growth of natural gas production. Despite short-term prospects for travel and tourism, recovery is likely to be strong when it does take hold and will be hugely beneficial for the region.
News for the UAE economy has been relatively negative compared to the rest of the region since the start of the year, with the authorities tightening restrictions in response to soaring COVID-19 infections. This has prompted a downward revision to the forecasts for UAE growth in 2021. Non-oil GDP is expected to expand by just 3.3% in 2021 (down from 4.2% three months ago). Given the ongoing oil GDP slump, total GDP will be flat this year, after an estimated fall of 7.7% in 2020, the weakest the economy has been in three decades. However, GDP should then grow by 5.5% in 2022, as both the oil and non-oil sectors pickup strongly.
In Kuwait in early March a new cabinet was appointed, but political tension will continue to simmer, which may constrain policy making. The initial economic recovery from the pandemic will be muted. The reversal of OPEC-mandated oil output cuts in 2022 however will boost growth in 2022-23, to an average of 5.5% a year.
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