Economies in the Gulf Cooperation Council (GCC) are set to grow by 6.5% in 2022 making them one of the strongest performing regions of the world this year, and delivering their strongest growth in at least a decade, HSBC said in a new report.

The annual HSBC Economist Roadshow, which is in the Middle East, said for 2023 the growth forecast for GCC is 5%. In Bahrain, GDP growth of 4.3% is forecast for 2022 and 2.8% in 2023.

Earlier, the IMF projected Middle East and North African to grow by 5%, up from 4.1% in 2021, while for the GCC oil exporters, growth is projected at 5.2% this year with high oil prices and robust GDP growth offsetting the global headwinds

“Our expert economic analysis team always provide actionable insights and perspectives especially in a time when conditions in the global economy are raising many questions about the outlook for growth, inflation and investment,” said Chris Russell, CEO of HSBC in Bahrain. 

Simon Williams, Chief Economist, CEEMEA, said: “We are seeing growth heading into next year with solid momentum and few signs of imbalances that threaten near-term performance. We are comfortable with the growth outlook which we see driven by ongoing gains in domestic demand.”

James Pomeroy, Senior Global Economist, said: “Inflation may slow more quickly within the goods sector than elsewhere. Supply chains continue to ease up rapidly the cost of sending freight from Asia to the US has now fallen by 85% since this time last year and if demand for goods dwindles, discounting may come into play.”

Dominic Bunning, Head of FX Research in Europe, said: “The key components that have supported USD strength such as the soft global growth dynamics, fragile risk appetite and relatively higher US yields, should continue in the months ahead, in our view.”

The roadshow this year visits Abu Dhabi, Dubai, Kuwait City, Muscat, Doha, Manama and Riyadh.  

(Writing by Brinda Darasha; editing by Seban Scaria)