* The regional banking group forecasts headline GDP growth of 4.5% in Qatar this year

Regional banking group Emirates NBD expects Qatar's non-hydrocarbon sectors to see faster growth of 6%, boosted by hosting the FIFA World Cup in the second quarter (Q2) of 2022. The country’s oil and gas sector is also expected to expand for the “first time in almost a decade”, Emirates NBD said and noted, “We forecast headline GDP growth of 4.5% in 2022.”
In its MENA Quarterly (Q1, 2022), Emirates NBD said, “As 2022 begins, the outlook for the MENA region is for the most part more positive than seen over the past two years. For the GCC countries and other regional oil exporters, economies look set to enjoy both higher oil prices and increasing oil production that will both help balance the government books and drive real GDP growth.
“We expect the focus to remain firmly on reform and diversification and as such a marked increase in government spending is unlikely despite this boon as the authorities look to decouple their growth cycles from oil’s ups and downs.”
Emirates NBD said the whole region will continue to benefit from the ongoing recovery from the Covid-19 pandemic. Despite many countries in the region seeing rising case numbers as the year begins, which will weigh on activity in the first quarter, the sense remains that the pandemic is starting to play itself out.
“As such we anticipate that those economies with significant tourism sectors should see visitor numbers rise once more, in a positive development for employment and FX inflows. There are two major events in the GCC this year – Dubai’s Expo 2020 (Q1) and the FIFA World Cup in Qatar (Q4) – which should further support the tourism recovery in the region.”
While the outlook is broadly constructive, Emirates NBD said tighter monetary policy and slower global growth are potential headwinds to growth in the MENA region, and the Covid-19 pandemic still poses a key downside risk.
In respect of the UAE and Saudi Arabia, Emirates NBD said the UAE has enjoyed a strong finish to 2021, with Expo 2020 and rebounding tourism boosting domestic demand.
The property market performed well in Dubai in 2021, with apartment and villa sales prices showing their first yearly increase since 2014.
In Saudi Arabia, stronger oil sector growth this year will drive headline GDP to 5.7% from an estimated 2.5% in 2021.
According to Emirates NBD, Oman’s budget deficit narrowed sharply to just -4% GDP in 2021, down from -15.8% GDP in 2020. The main driver was the improvement in oil and gas revenues last year.
As for Kuwait, Emirates NBD estimates real GDP for Kuwait to have reached 1.4% for 2021 and forecasts that to accelerate to 4.6% in 2022 largely on the back of higher oil output.