The latest predictions from the International Monetary Fund reveal that the economy of the UAE will grow considerably in the Arabian Gulf by 2023.
The UAE economy will expand by 4.2% in 2023, outperforming the economies of Saudi Arabia (3.7%), Bahrain (3%), Oman (4.1%), Kuwait (2.6%), and Qatar (2.4%) to become the fastest-growing in the Arabian Gulf.
According to the International Monetary Fund, Kuwait will have the Gulf’s fastest-growing economy in 2022, with an annual growth rate of 8.7%, barely ahead of Saudi Arabia’s 7.6%. The UAE’s economy will expand by 5.1%.
The International Monetary Fund claims that for Saudi Arabia, its predictions were based on WEO projections for export revenues and its knowledge of the government plans contained in the 2022 budget.
The world economy is facing some complex problems. According to the International Monetary Fund’s World Economic Outlook Report from October 2022, the invasion of Ukraine by Russia, worsening financial conditions in most countries, and the continued spread of COVID-19 all hurt the outlook.
The effectiveness of the monetary policy, the outcome of the conflict in Ukraine, and the potential for additional pandemic-related supply-side disruptions, such as in China, all significantly impact the global economy’s future health.
According to the International Monetary Fund, the growth of the world economy will slow down, dropping from 6.2% in 2021 to 3.2% in 2022 and then to 2.7% in 2023.
The International Monetary Fund stated that “this is the poorest growth profile since 2001 and reflects major slowdowns for the main economies, except the global financial crisis and the acute period of the COVID-19 pandemic.”
It also added that “particularly significant and to the downside” risks still exist for its economic outlook.
The International Monetary Fund also cautioned that monetary policy might incorrectly determine the best course of action to lower inflation. At the same time, additional shocks to the price of energy and food could intensify inflation and lengthen its duration.
The International Monetary Fund urged monetary policy to continue on its current trajectory to restore price stability to resume global growth.
Since individuals and companies base their wage and price expectations on their recent inflation experience, front-loaded and vigorous monetary tightening is essential, according to the International Monetary Fund, to prevent inflation from de-anchoring.
The International Monetary Fund also called for multilateral cooperation, saying that failing to do so would put the world economy at risk of falling apart and “erase 30 years of progress toward economic prosperity.”