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Gulf economy is likely to be bountiful thanks to high oil prices

Anh Phuong (TV reporter in the Middle East)Monday, May 30, 2022 20:12 GMT+7

An oil refinery in Saudi Arabia. Photo Reuters

This is a forecast made by the International Monetary Fund (IMF). According to the IMF’s forecast, the oil price in 2022 will reach an average increase of about 55% compared to last year. Specifically, the average oil price in 2022 will be about 107 USD/barrel. Calculations show that for every 10 USD/barrel increase in oil price, the budgets of Gulf countries will increase by more than 3%.

However, the Gulf projections also warn of the risk to these economies from rising food prices. The Gulf region is dominated by desert and mountainous terrain, and many countries have to import almost all of their food to meet their food needs. According to the IMF, this year’s food prices will increase by about 14% compared to 2021, which is also the year that also recorded a very strong increase in food items.

Benefiting from high oil prices, the Gulf is also expected to be the center of innovation and creativity in the Middle East and North Africa in the coming time. In particular, one of the top priority goals is the development of renewable energy to replace oil.

According to forecasts in the Gulf, although the world is thirsty for real oil, the demand for black gold will start to decline from around 2032-2035 to enter the era of green energy.

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