New forecasts place the Gulf among the world's top 10 economies
The coronavirus pandemic, the food and energy consequences of the war in Ukraine, the effects of climate change, a new and progressive polarisation of the international community... Over the last two years, the world has faced, one after another, an almost endless series of events that have put the brakes on its economic growth. The forecasts of the World Bank and the International Monetary Fund (IMF) have been steadily corrected month by month, and look increasingly bleak for most of the world's countries.
"World trade growth in 2022 and 2023 is likely to decelerate more than initially expected due to lower global demand and supply chain problems," stated the IMF's latest World Economic Outlook Update.
However, in this scenario, a small group of powers have managed to dodge the economic repercussions of all these setbacks - at least at the macroeconomic level. Saudi Arabia, Bahrain, the United Arab Emirates, Kuwait, Oman and Qatar, the six countries that make up the Arabian Peninsula on the western shores of the Persian Gulf, are among them.
According to estimates by international economic institutions, the Gulf States will reach 2.1 billion dollars in GDP (Gross Domestic Product) by the end of 2022. A figure that is 25% more than last year - when it was around 1.68 billion - and which would surpass the GDP of Italy, which was, until now, in ninth position in the ranking of the world's top ten economies.
Although the list is made up of countries several times larger than the Arabian Peninsula - such as the United States and China - it should be noted that the entry of the six Arab countries into the top 10 has been based on the GDP of the entire bloc. In this way, and remaining behind the US, China, Japan, Germany, the UK, India, France and Canada, the Gulf would leave behind countries such as Russia, Brazil and South Korea.
Saudi Arabia (with $1.04 billion), the United Arab Emirates ($501.4 million), Qatar ($225.7 million), Kuwait ($186.6 million), Oman ($110.1 million) and Bahrain ($44.2 million), in that order, are expected to account for 2% of the world economy.
In 2020, the Gulf was the world's thirteenth largest economy. Just two years later, the bloc is already in ninth place. A leap of four places that, to make matters worse, has taken place in the midst of countless international crises.
What factors account for this strong economic growth? None other than the production and export of oil and other hydrocarbons to the rest of the world. The six oil-producing giant Gulf states, as well as many of their Middle Eastern and North African neighbours, have benefited enormously from rising oil and gas prices - since the beginning of last year - and from the increased demand brought about by the end of the post-Covid-19 containment and restrictions, as well as the interruption of supplies from Russia due to sanctions. This has been reflected in the large fiscal surpluses in the Persian budgets.
Saudi Arabia, the Wahhabi oil giant, is undoubtedly the great leader of this growth. Surpassing for the first time in its history the $1 billion GDP barrier, the Kingdom's economy will account for almost half the wealth of the entire bloc by 2022. Some 49.3%. This amount is expected to be used to adopt measures to reduce dependence on oil revenues, diversifying its sources of profit and supporting private sector initiatives.
However, according to ratings agency Moody's, Saudi Arabia's economy, like those of the other Gulf states, still has a long way to go to achieve real financial diversification.
At the same time, the State of Qatar - although not as economically significant as its Saudi neighbour - has become another of the countries with the fastest economic growth. It is not only its gas potential - key to replacing Russian supplies - that is fundamental in increasing its income, but also its role as host of the football World Cup. A winning combination that has given it a real and growing influence, both regionally and internationally.
