When it comes to the economic prognosis in the UAE, it remains strong despite the challenges posed by the global market. The GDP of the Middle East was expected to rise in 2022 by 5.2% to an analysis conducted by credible sources. However, nations in the Middle East need to respond to the continuous Ukraine and Russia conflict, the slowdown in China’s economy, and the tightening of the market conditions across the world.
Kavan Choke– How to have the increase in the prices of oil led to a surge in the economic growth in the UAE?
Business and finance expert, Kavan Choksi, believes that the surge in the prices of oil in the Middle East has given the macroeconomic environment of the Gulf nations considerable support for accelerated economic growth this year. The rise in oil prices had the goal of combating the rise in inflation and persistent disruptions in the supply chain on importing nations for regional commodities.
This subject in the Middle East is interesting for debate as the GCC nations are now entering into negotiations to help with the global concerns about the supply of oil because of the geopolitical chaos in the world. However, one should note that the rising prices of oil do go against their long-term goal of diversification in the region. According to economic analysts and business experts, the Middle East is a region that is more vulnerable to climate change because it is highly ecologically sensitive in nature.
Boosting the transformation to renewable energy
The rise in the prices of energy will enhance the renewable energy transformation in the region. Leaders in the Middle East had displayed resistance when it came to postponing progress in the change in power, especially with the growing global demands.
However, economic analysts and financial experts believe that there will be a scenario where significant economies of the world will enter into recession and subsequently impose pressure on the demand for oil, placing the GCC nation’s resilience to its test.
The impressive economic recovery of the GCC nations after the pandemic
The nations of the Middle East have bounced back positively from the negative impact of the coronavirus pandemic that hit the whole world in 2020. Its economic recovery has been really impressive, especially when it opened its doors to tourism and eased covid-19 protocols in the region. In fact, the nation serves as a role model to the world as it made a remarkable economic recovery last year.
The forecast for 2022
According to business and finance expert Kavan Choksi, the GDP of Saudi Arabia and its growth prospects have risen because of the increasing prices of oil, with an output that is expected to increase by about 7.1% in 2022 from 4%.
Besides the above, in the UAE, there are several government reforms being launched, and this will trigger the increased oil output to make it grow to support the growth of 6.7% this year. Besides the increase in spending, the lucrative revenue derived from hydrocarbons implies that all of the six nations in the Middle East will produce a surplus budget this year.