GCC to see 2.5% GDP growth over 2021-23: S&P

The GCC countries will see a modest economic recovery over 2021-2023, with real GDP growth of 2.5%, after a contraction of about 6% in 2020, said S&P Global Ratings in a new report.

This year’s contraction is split relatively evenly between the hydrocarbon (oil and gas production) and nonhydrocarbon sectors and stems from Opec production cuts, alongside weaker regional demand due to low oil prices, and restricted economic activity due to the Covid-19 pandemic, said the RatingsDirect report.

The hydrocarbon sector accounts for close to 40% of the GCC’s real GDP.

Saudi Arabia’s economy is almost twice the size of the next largest GCC sovereign, the UAE, and so has an overweight bearing on the aggregate data.

“We expect a broad recovery across hydrocarbon and nonhydrocarbon sectors, over the period to 2023. Our base case assumption is that Opec+ production cuts, amounting to about 17% of October 2018 production, end in April 2022,” S&P Global Ratings said in the report.

“Our current assumptions see Brent oil prices averaging $50 in 2021-2022 and then $55 in 2023 and beyond.

“These assumptions are based on our view that widespread availability of effective immunization against the coronavirus could come by the middle of next year. As the situation evolves, we will update our assumptions and estimates accordingly,” it added. – TradeArabia News Service

 

Source: http://www.gdnonline.com/Details/909890

 

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