IMF raises most Gulf countries' economic growth forecasts

FILE PHOTO: International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas/File Photo

DUBAI (Reuters) - The International Monetary Fund expects most Gulf economies to recover this year at a faster pace than previously estimated, as it raised its 2021 global growth forecast to 6% from 5.5% less than three months ago.

Saudi Arabia’s economy, the region’s largest, is expected to grow 2.9% this year, up from the 2.6% forecast in January, the IMF said in its latest World Economic Outlook, released this week.

The kingdom’s economy contracted 4.1% last year due to the twin shock of the COVID-19 pandemic and lower oil prices.

The United Arab Emirates, the Gulf’s second largest economy, will see growth of 3.1% this year, rebounding from a 5.9% contraction in 2020, the IMF said. In October last year it had forecast a 6.6% drop in 2020 and 1.3% growth this year.

Oman saw the biggest positive revision of the Gulf countries, from expectations of a 0.5% contraction this year to a forecast of 1.8% growth.

Bahrain’s economy is now expected to grow 3.3% this year versus a forecast of 2.3% in October. Forecasts for Kuwait and Qatar remained almost unchanged, with Kuwait expected to post 0.7% growth this year, up from an October estimate of 0.6%.

Qatar’s economy is estimated to grow 2.4%, just below the previous 2.5% estimate.

The IMF on Tuesday said unprecedented public spending to fight the COVID-19 pandemic, primarily by the United States, would push global growth to 6% this year, the fastest pace since 1976.

Reporting by Davide Barbuscia; Editing by Kirsten Donovan