Qatar economy is set to rebound this year with the World Bank forecasting it to grow 3% in 2021, which will be the best in the entire GCC region.
According to the World Bank, Qatar’s economy is estimated to have contracted with a -2% growth in 2020.
In 2022, the Bank has forecast a 3% growth for Qatar economy.
The other GCC countries are forecast to grow between 0.5% and 2.2% this year.
In an online briefing, the World Bank said economic activity in the Middle East and North Africa (Mena) is forecast to recover modestly to 2.1% in 2021, reflecting the lasting damage from the pandemic and low oil prices.
The recovery is contingent on containment of the pandemic, stabilising oil prices, no further escalation of geopolitical tensions, and the assumption of a vaccine rollout in the second half of the year.
By 2022, after two years of expected recovery, output is still about 8% below the output projected prior to the pandemic, with a larger impact on oil importers than exporters.
Among oil exporters, growth is expected to recover to 1.8% this year, supported by normalising oil demand, the scheduled easing of the Opec+ oil production cuts, policy support, and the gradual phasing out of domestic pandemic-related restrictions.
Growth in oil importers is expected to rebound to 3.2% in 2021 as mobility restrictions are gradually eased and exports and domestic demand recover slowly.
Morocco is expected to rebound to 4% in 2021 as the country’s agricultural output recovers from drought and the government eases domestic lockdowns.
According to World Bank, the Covid-19 pandemic caused output losses in the region of an estimated 5% in 2020. Employment losses spiked in many economies and employment remains depressed.
The income shock from the pandemic is expected to increase the number of people below the $5.5 per day poverty line in the region by tens of millions this year.
Output by Mena oil exporters is estimated to have contracted by 5.7% last year. Oil sector output growth continues to be constrained by commitments to the Opec+ production cut agreement, the World Bank noted.
Oil importers experienced a milder contraction of 2.2% in 2020, reflecting an initially limited Covid-19 outbreak in the first half of the year and lower oil prices. However, the pace of new infections has risen rapidly and fresh policy uncertainty has compounded the impact of pandemic-related disruptions to activity.
Most economies in the region have announced fiscal stimulus packages that include increased spending on health and social safety nets, tax payment reductions and deferrals, and loans and guarantees to firms. Monetary policy adjustments, the World Bank said, have also helped to cushion the economic impact of the pandemic, with the average interest rate cuts of over 125 basis points.