How the economies in the Arab World are faring

The five largest Arab economies in 2021 continue to do well. Saudi Arabia and the UAE at the forefront, writes Ahmad Abdul -Rahman.

Saudi Arabia ranked first, with its gross domestic product (GDP) expected to reach USD 804.9 billion at current prices by the end of 2021, according to the International Monetary Fund's (IMF) estimates. This is in spite of the fact that its economy was affected by a double crisis represented by the Covid-19 pandemic and the collapse of oil markets. Saudi Arabia's GDP reached $701.5 billion in 2020.

The IMF said the United Arab Emirates (UAE) ranked second in the Arab world, with a GDP of $401.5 billion, one place ahead of last year's ranking, with an estimated GDP of $354.3 billion in 2020.

Egypt slipped one place to third place in 2021, with its GDP expected to reach $394.3 billion, compared to $361.8 billion in 2020. Iraq ranked fourth for the second year, with $190.7 billion in 2021, compared with $172.119 billion in 2020.

Qatar retained its fifth position in 2021. Its GDP reached $166 billion in 2021, compared to $146.1 billion in 2020.

Below are the details of the list of the Arab economies, according to Forbes magazine

1-Saudi Arabia

The reforms implemented by Saudi Arabia within the "Kingdom's Vision 2030" reflected positively on the economy and helped it overcome the crisis it faced last year. The reforms included the expansion of the digital economy, especially with regard to government and financial services.

The IMF expects Saudi real GDP to grow by 2.4% in 2021, to continue the upward growth pace to 4.8% in 2022, after witnessing a contraction of 4.1% last year.

The real non-oil GDP growth rate recovered in the second half of 2020. Indicators showed a continuation of a recovery in 2021. Non-oil growth is expected to reach 4.3% in 2021 and 3.6% in 2022, compared to a decline of 2.3% in 2020.

The latest data from the General Authority for Statistics in Saudi Arabia indicates that unemployment among Saudi citizens decreased to 11.7% in the first quarter of 2021, which is 0.1% lower than its level in the same first quarter of 2020. The annual inflation rate increased in May 2022 by 5.7% compared to the same month in 2021. It reached 5.3% in April 2021.

2- United Arab Emirates (UAE)

The IMF expects real GDP growth in the UAE of 3.1% in 2021, after witnessing a contraction of 5.9% during the past year due to the Covid-19 pandemic.

The per capita GDP in the UAE increased by 10% to $35,200 in 2021, compared to $31, 90 last year, according to the IMF's forecasts for 2021.

The UAE is ranked second in the Arab world in terms of per capita GDP, after Qatar, which topped the list this year with $59,000 and 2021 with $52,000.

3-Egypt

Egypt navigated the COVID-19 crisis and has a strong economy thanks to the reforms it has implemented since 2016. Egypt has managed to reach a balance between targeted spending to protect expenditures in the health and social sector and achieving financial sustainability while rebuilding international reserves, according to the IMF.

With GDP growth reaching 2.8% in the fiscal year 2020/2021, it is expected to recover and grow by 5.2% in the current fiscal year 2021/2022. However, these forecasts are tainted by uncertainty as Egypt remains vulnerable to shocks due to its high public debt and overall financing needs.

The IMF expects that the per capita GDP in Egypt will continue to rise, reaching $3,830 in the 2021 fiscal year that ended on June 30, an increase of 6.8% compared to $3,580 last year and $3,010 in 2019. Because of its high population, Egypt ranks ninth in terms of the value of per capita output in the Arab world, after Qatar, the UAE, Kuwait, Bahrain, Saudi Arabia, Oman, Iraq and Jordan.

4-Iraq

The IMF expects that Iraqi GDP will begin to recover slowly this year, predicting it will grow by 1.1%, after it contracted last year by 10.9%. It recorded growth of 4.5% in 2019, before the outbreak of the Covid-19 pandemic.

The fallout from the pandemic and the sharp decline in oil revenues have exacerbated long-term economic vulnerabilities while limiting the government's ability to provide an effective fiscal response to the crisis. It is expected that oil production in Iraq will continue to decline to 3.95 million barrels per day, compared to 4 million barrels per day last year and 4.6 million barrels in 2019.

The per capita GDP in Iraq is likely to rise by 7% to $4,6000 this year, compared to $4,3000 in the pandemic year, while it had recorded $5,7000 in 2019.

Iraq ranks seventh in the Arab world in terms of per capita output this year, after Qatar, the UAE, Kuwait, Bahrain, Saudi Arabia and Oman, respectively.

5-Qatar

Qatar's GDP declined by 2.6% last year due to the Covid-19 pandemic, but it is likely to recover growing by 2.4% in 2022. This is better than before the spread of Covid-19, when it achieved a growth rate of 0.8% in 2019.