Arab economies expected to grow by average 5.4 percent in 2022 : AMF

Arab economies are expected to grow by 5.4 percent in 2022, the seventeenth edition of the Arab Economic Outlook report by the Arab Monetary Fund said.
A rise in oil prices, production increase in Arab oil-exporting countries and growth-promoting reforms are said to be the reason for the economic surge.
Arab countries are expected to face relatively high inflation rates in 2022 due to local and global inflationary pressures, the AEOR noted.
The report includes macroeconomic forecasts, growth and inflation forecasts for Arab economies for 2022 and 2023.
It noted the global economy is experiencing challenges related to the global supply chains and high commodity prices, raising concerns about global food security.
As a result, international institutions have reduced their forecasts for global economic growth issued in January 2022.
Growth in Arab countries will be affected by macroeconomic policies, the continuation of financial packages and its impact on containing the repercussions of COVID-19, the report noted.
There is also a positive impact of implementing economic reform programs and adopting future visions and strategies aimed at enhancing economic diversification, improving business environments, encouraging private investment, and improving economic resilience.
The AMF expects Arab countries’ economic growth slow to about 4.0 percent in 2023 due to the decline in global economic growth, commodity prices, and gradual exit from expansionary fiscal and monetary policies.
Oil-exporting countries in the Arab World will benefit throughout 2022 from the increased oil production quantities within the “OPEC+” agreement and relatively higher oil and gas prices in international markets.
Overall, Arab oil producers are expected to grow by 6 percent in 2022, compared to 3.2 percent in 2021, while oil prices are expected to decline in 2023.
The GCC countries are expected to record a relatively high growth rate of 6.3 percent in 2022, compared to 3.1 percent in 2021, due to recovery from COVID-19, economic reforms, and continued adoption of stimulus packages, while 2023 will see a decline to 3.7 percent in economic growth.
Other Arab oil exporters will benefit from increased production quantities within the OPEC+ agreement and a rise in global oil prices to raise their growth rates.
As a result, they are expected to achieve 4.6 percent in 2022, which is higher than 3.1 percent in 2021. However, due to business environment challenges, their growth rate will come down to 3.9 percent next year.
The oil-importing Arab countries are expected to achieve a moderate 4.1 percent growth rate in 2022, compared to a 2.7 percent growth rate in 2021, owing to their internal and external balance challenges.
However, a relative improvement in the economic growth rate of the group countries is projected in 2023 to reach 4.6 percent due to improved aggregate demand levels and a gradual easing of the pressures on public budgets and balances of payments due to the expected decline in commodity prices.
The AMF expects Inflation rates to reach relatively high levels in some Arab countries during 2022, brought on by factors including food price increases, energy price increases, and escalating inflationary pressures.
In addition, agricultural production changes related to climate change will also affect general prices in some countries. Thus, the Arab countries’ inflation rate is expected to reach 7.6 percent in 2022 and 7.1 percent in 2023.