\n<\/p>\n
Atradius<\/a>‘ latest economic report on the Middle East and North Africa (MENA) acknowledges the importance of the growth in oil prices for the energy-exporting economies of the region. However, it also notes the limits to growth presented by an underdeveloped private sector and the ongoing downside risks to the economic outlook caused by the pandemic.<\/i><\/p>\n DUBAI, \u00a0<\/p>\n Many of the energy-exporting nations have also enacted strong vaccine \u00a0<\/p>\n However, despite a brief role when they led the economic recovery during \u00a0<\/p>\n The development of the region’s private sector is also likely to have an \u00a0<\/p>\n Although vaccine \u00a0<\/p>\n Schuyler D’Souza, \u00a0<\/p>\n Get the Atradius
\nUAE –\u00a0Media OutReach<\/a>\u00a0–\u00a08 February 2022 –\u00a0Rising
\noil prices are boosting economic growth throughout the oil producing economies
\nof the MENA region, with predictions that GDP will largely return to
\npre-pandemic levels during the course of 2022. Oil prices are expected to level
\nout at about USD70 per barrel, with global demand for oil picking up. In the
\ncountries of the Gulf Cooperation Council (GCC) oil activity is expected to
\ngrow by up to 8% in 2022, a huge increase on the 0.5% recorded last year.<\/p>\n
\nstrategies, which in turn has enabled them to lift lockdown measures and reopen
\ndomestic sectors such as retail and tourism. <\/p>\n
\nthe oil price shock, several non-energy exporting nations have now slipped
\nbehind their GCC neighbours when it comes to short-term growth predictions. For
\nJordan and Lebanon, in particular, ongoing high Covid-19 infection rates are
\nnegatively impacting their economic rebounds and contributing to weak economic
\ngrowth.<\/p>\n
\nimpact on the size and speed of the region’s economic recovery. As the report
\noutlines, without private sector reform, economic growth will slow. This is
\ntrue of most GCC countries where the share of the state-owned hydrocarbon
\nsector dwarfs their various private sectors, but also in Algeria and Egypt
\nwhere restrictions on imports and foreign investment, and a preferential
\ntreatment of state-owned companies over private companies in public tenders are
\nadditional factors that are stifling business.<\/p>\n
\nprogrammes and the development of the private sectors are important for the
\nregion’s economy, growth is still heavily dependent on oil. Niels de Hoog,
\nSenior Economist, Atradius, acknowledged that the world economy will still
\nrequire energy from fossil fuels on a large scale for several decades. However,
\nhe noted that despite plans to expand the capacity of hydrocarbon production,
\nmany GCC nations are also investing in renewable energy. He said: “Investments
\nin renewable projects are being stepped up simultaneously to increase the share
\nof domestic energy consumption that comes from renewable sources. The additional
\nfossil fuel production will mainly be destined for exports.” At the same time,
\nthe rise in home-grown renewables is also changing the economic prospects of
\nthe region’s non-hydrocarbon producers for the better as they become less
\ndependent on imported energy.<\/p>\n
\nManaging Director Middle East, Atradius said: “The Atradius Regional Economic
\nOutlook for the Middle East and North Africa paints a varied picture. On the
\none hand we are seeing a rebound from the economic crises of the pandemic
\ndownturn and the oil price shock. However, on the other hand, additional
\nfactors are impacting projected growth in the region. Primary among these are
\nthe slow rate of vaccine roll-out in some of the economies and heavy dependence
\non state-owned hydrocarbon businesses. This picture may change over the next
\nfew years as some of the region’s countries expand investment in renewable
\nenergy and enable growth among the private sector.” <\/p>\n
\nEconomic Research Report here: https:\/\/atradius.com.hk\/en\/publications\/economic-research-petrodollars-boost-mena-private-sector.html<\/a><\/p>\n