Kuwait Economy Will Return To Pre-corona Levels In 2023

The agency “Fitch Solutions” expected that economic activity in Kuwait will return to the level before the “Corona crisis” by 2023, in conjunction with a strong recovery of oil production in the country in 2022.

The agency said in its report that the non-oil sector in Kuwait will remain structurally weak, with its growth declining and its continued weakness. The political stalemate in Kuwait prevented much needed economic and financial reforms to diversify the economy, and the failure to pass a new debt law did not allow the government to benefit from the international capital markets to finance the deficit.
 
Economic growth and indicated bright economic prospects for the Middle East and North Africa next year, as the region begins to get rid of some of the worst effects of the Corona pandemic and move towards economic growth, expecting that with the recovery of oil prices and demand for it, economic growth will be stronger, and financial deficits will shrink, While a more stable economic outlook will allow greater progress in economic and financial reforms in the region.

She added that economic activity in the Middle East and North Africa will accelerate in 2022, which will make it the only region in the world that is witnessing increasing growth rates. We expect growth in the region to accelerate from about 3.2% in 2021 to 4.1% in 2022, with the increase in oil production and the continued recovery of the non-oil sector to achieve gains.

The non-oil economy and increased: that many of the largest economies in the region will witness continuous strong growth in the non-oil economy, especially in the Gulf countries, and we expect its growth to increase from 2.9% in 2021 to 4.9% in 2022, which is the highest rate in any other sub-region of the Middle East .

Fitch Solutions explained that the Dubai Expo, which will end next March, the FIFA World Cup in Qatar and the high vaccination rates will encourage tourism in the region and support private consumption on a larger scale, noting that at the same time, investment activity will benefit from the momentum of reforms. The accelerating pace in the Gulf region, especially in Saudi Arabia and the UAE, which are moving forward with economic and investment reforms suitable for foreign businesses.

Economic diversification
The agency expected that the Gulf countries will lead the progress in advancing reforms and economic diversification efforts in the region next year, especially from Saudi Arabia and the Emirates, which have increased the pace of reforms in recent quarters with positive effects on the business environment in them, explaining that any fluctuation in oil prices in the future and the increasing push towards Green energy will only lead to greater impetus for Gulf governments to reduce dependence on oil revenues.

And “Fitch Solutions” saw that outside the Gulf countries, many other major economies in the region are expected to witness strong economic growth as well, expecting an acceleration of economic activity in Egypt to 5% in the 2021-2022 fiscal year and 5.5% in the 2022-2023 fiscal year Against the background of the investment boom, the increase in the number of tourists and the strong inflows of remittances from abroad.

Two factors to increase oil production
She explained that two factors will lead to an increase in oil production in 2022, which will boost economic growth in the Gulf countries, namely:

1- The easing of “OPEC +” restrictions allowed for production restrictions and a rise in oil and gas production by 9.8% in 2022, which is the largest annual increase in more than 30 years, after an increase of 3.5% lost in 2021 and a contraction of 9.3% in 2020.

2- Entering new gas production facilities in the region, especially in Qatar, through the Barzan project in the north.

Mutants slowing global growth

The agency considered that the “Omicron” mutator and the possibility of more mutant variants of Corona constitute the greatest negative risks, explaining that any dangerous mutagen may slow global growth, negatively affect oil prices, and the return of “OPEC +” to impose restrictions on production, and the return of Impose restrictions on travel and movement.

 

 

 

SOURCE  ALQABAS

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