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Khatija Haque - Head of Research & Chief Economist
Edward Bell - Senior Director, Market Economics
Shady Elborno - Head of Macro Strategy
Daniel Richards - MENA Economist
Published Date: 28 October 2021
Central banks appear anxious to get ahead of rapid inflation via bringing asset purchases to an end and signalling when they may begin to raise rates. But the normalization of policy could come just as the economic recovery is showing more and more signs of slowing.
Energy prices have spiked higher in the final months of 2021 thanks to supply shortages in some key markets. While contributing to inflation worries for many countries, higher oil prices will be a boost for regional economies and help to support growth and fiscal balances.
UAE-China: A global trade axis The importance of the trade and economic ties between the United Arab Emirates and China cannot be underestimated and has grown significantly since the diplomatic relationship between both countries was established in 1984.
Improving oil outlook will boost Iraqi economyWe anticipate that Iraqi real GDP growth will have remained very weak this year with a forecast of 1.1% following 2020’s double-digit contraction, weighed down by OPEC+ oil production curbs and the ongoing Covid-19 pandemic. This will accelerate to 5.3% in 2022 on the back of higher oil production and easing pandemic pressures, but with elevated inflation and ongoing power shortages, the non-oil sector will remain vulnerable.
GCC economies announce net zero carbon targets The UAE is committing to a target of 2050 when its economy will produce net-zero emissions while Saudi Arabia and Bahrain have targeted a date of 2060. The three countries stand out as the first among major economies in the Middle East and North Africa to publicly commit to a net-zero target and also as they collectively represent around 13% of total global oil production.
Energy shortages will keep oil prices high We don’t expect the current phase of energy market apparent tightness to dissipate quickly and some of it will bleed into early 2022.
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