Economic prospects remain promising in the Arab region despite the global economy’s deteriorating growth following the Covid-19 outbreak.
Supporting this claim, Dr Abdulrahman bin Abdullah Al-Hamidy, chairman of the Board of Directors of the Arab Monetary Fund (AMF), indicated that the growth rate of Arab economies is expected to rise by 5.4% in 2022, compared to 3.5% in 2021.
The relative improvement in global demand levels, the expansion of the oil and gas industries, and the adoption of stimulus policies by Arab governments to encourage economic recovery have contributed to steady growth.
“Those estimates were relatively optimistic at the beginning of the year, amounting to about 3.5% and 4.4%, respectively, which reflects the state of uncertainty and what global developments will bring about. It also shows the possibility of the global economy entering a phase of so-called stagflation,” said Abdullah Al-Hamid at the 46th Ordinary Session of the Council of Arab Central Banks and Monetary Authorities Governors hosted by the Kingdom of Saudi Arabia.
“That is, given that the latest estimates indicate a rise in the global inflation rate, to reach about 8.3% in 2022 and 5.7% in 2023, compared to an average of 3.2% and 4.7% in 2020 and 2021, respectively,” the AMF chief added.
SAUDI ARABIA’S GDP ON TOP GEAR
Meanwhile, Saudi Arabia’s gross domestic product (GDP) is anticipated to increase at the fastest rate in ten years, according to credit rating agency S&P, reaching 7.5% in 2022.
The agency revised its assessment for Saudi Arabia to positive due to the nation’s quick post-pandemic recovery. The kingdom’s inflation rates are relatively low compared to its peers. They should remain under control, given that the government subsidizes the cost of food and gasoline and pegs the local currency to the relatively strong US dollar.
The kingdom’s short and long-term foreign and local currency sovereign credit ratings have also been revised to A-/A-2. The credit rating agency stated that the country’s strong GDP growth, sound financial practices, and government-led economic diversification initiatives reflect the country’s positive outlook.
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