RIYADH: Higher oil prices will support looser Gulf fiscal spending for the next two years, with a knock-on effect on non-oil growth in the region, according to Capital Economics.
The economic consultancy updated its oil-price forecasts this week, predicting Brent crude will end 2022 at $70 a barrel and 2023 at $65 a barrel, up from previous forecasts of $60 and $55, respectively. The change was driven by the expectation that Russia and some smaller producers within OPEC+, the alliance of the Organization of Petroleum Exporting Countries and other producers, will struggle to meet their production quotas.
That led to an upgrade in Gulf hydrocarbon export revenue prediction of 8 percent and 11 percent for this year and next, respectively, Capital Economics Middle East and North Africa Economist James Swanston wrote in a research note.
“The upshot is that higher oil prices will keep the door for fiscal loosening ajar for longer, which may provide scope for slightly stronger growth in non-oil sectors,” he wrote. “But, as prices head below $70pb in 2023, that door will gradually close.”
For Middle East economies outside the Gulf, continued high oil prices will mean current-account deficits stay wider for longer, the note said. For countries that haven’t scaled back fuel subsidies, fiscal budgets will also remain under pressure.
“This furthers cement our view that, with officials struggling to push through fiscal consolidation, Tunisia will continue along the past to a sovereign default,” Swanston said.
Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023
Capital Economics sees stronger Gulf non-oil growth in 2022 and 2023
Pakistan PM directs ministries to fast-track foreign investment recommendations
- Pakistan’s foreign direct investment fell by over 25 percent during July-November period, official data states
- Premier directs ministries to provide support via embassies worldwide to facilitate foreign investors
ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday directed all ministries to prepare recommendations for domestic, foreign investment and development projects related to their sectors, state media reported as Islamabad eyes sustainable economic growth.
The premier’s directives came while he chaired a meeting of the federal ministries on the implementation of economic governance reforms, state broadcaster Radio Pakistan reported.
Foreign direct investment inflows in Pakistan fell by more than 25 percent to $927 million during the July-November period, as per data from the central bank. Pakistan’s FDI inflows have never surged beyond $3 billion in nearly 20 years, worrying Islamabad as it seeks to escape a prolonged macroeconomic crisis.
“Prime Minister Shehbaz Sharif has directed all ministries to promptly prepare recommendations for domestic and foreign investment and development projects related to their respective sectors,” Radio Pakistan reported.
Sharif said it was his government’s top priority to provide institutional and administrative facilitation to investors.
The prime minister instructed federal ministries to provide “special importance” to proposals that promote exports.
“The prime minister directed the concerned ministries to provide effective support through Pakistani embassies worldwide to facilitate foreign investors,” the state media said.
Sharif stressed that equal attention be provided to industrial production, agriculture, and other key sectors to increase investment.
Pakistan’s government has said it is eyeing sustainable economic growth, driven by exports and foreign investment.
The South Asian country has recently signed agreements worth billions of dollars with regional allies such as Gulf nations, China and Central Asian nations to enhance cooperation in trade, investment, tourism, livestock, mines and minerals, and other sectors.
