Gulf Economic Monitor, November 2018 : Staying the Course on Reforms
The near-tripling of oil prices from their trough in January 2016, to nearly 80 US dollars per barrel in early October 2018, has spurred a recovery in the GCC economies, following three years of persistent weakness. Additional support has come from...
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| Language: | English |
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Washington, DC: World Bank
2018
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| Online Access: | http://documents.worldbank.org/curated/en/248661541781145130/Staying-the-Course-on-Reforms-In-Focus-Water-for-Prosperity-and-Development http://hdl.handle.net/10986/31014 |
| Summary: | The near-tripling of oil prices from
their trough in January 2016, to nearly 80 US dollars per
barrel in early October 2018, has spurred a recovery in the
GCC economies, following three years of persistent weakness.
Additional support has come from rising oil production, and
a slower pace of fiscal consolidation as government revenues
have increased. Saudi Arabia emerged from recession in the
first quarter of 2018 and Ku-wait, in the second quarter.
The United Arab Emirates, Qatar, Oman and Bahrain posted
positive economic growth rates in the first half of the
year. Higher energy prices and rising oil production are
also helping the GCC countries to narrow large fiscal and
external deficits, which had emerged in the wake of the 2014
oil shock. On aggregate, the region is expected to post
growth of 2.0 percent in 2018, following a contraction of
0.3 percent in 2017 (the first such contraction in over a
decade). Looking further ahead, growth is expected to reach
2.7 percent in 2020, as high energy prices and the
expiration of the OPEC agreement bolster government
revenues, support higher government spending and lift
domestic sentiment and activity. External and fiscal
imbalances are also expected to narrow, with Saudi Arabia
and the UAE achieving near fiscal balance by 2020 and, along
with Qatar and Kuwait, returning to cur-rent account
surpluses during 2018-20. This positive outlook is
underpinned by an upward revision of our oil price forecasts
from 60 US dollars a barrel for 2019-20 (in the February
2018 issue of the Gulf Economic Monitor) to 72 US dollars a
barrel for that time period. Projections also assume that
GCC countries will persevere with important structural
reforms initiated in recent years. |
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