MANAMA: GCC economies will grow 3.9 per cent year-on-year in 2021, a level not seen since 2015, HSBC economists have said.

Speaking during the bank’s Global Economic Outlook virtual roadshow in Bahrain yesterday they said this points to the strong underlying potential of the region, which is seen shrink on average by 5.6pc year-on-year in 2020.

HSBC’s chief economist for Central and Eastern Europe, Middle East and Africa (CEEMEA) Simon Williams said: “Across the GCC, we are seeing signs of states taking assertive policy action to manage the impact of the energy price slump and put public finances on a more sustainable footing.”

He added that in the long-term, high deficits, muted economic growth and rapid increases in the working age population mean that the well-recognised need for economic diversification is even more acute.

HSBC senior foreign exchange strategist Dominic Bunning and HSBC global economist James Pomeroy gave their views on the impact of Covid-19 on the global economy and explored various factors influencing macroeconomic trends, fiscal policy, as well as oil and foreign exchange markets.

They also addressed the challenges and opportunities awaiting Bahrain and the wider region in 2021.

The event was held at a critical time for the global economy, with countries around the world heading into the end of the year with increasing Covid-19 cases and global consumer confidence, which had shown signs of strengthening, starting to wane.

In the GCC, oil exporters have faced the additional challenge of low oil prices.

However, HSBC expects Bahrain to build back better.

The bank’s Bahrain chief executive Chris Russell said: “We were delighted to host so many friends of HSBC at our Global Economic Outlook virtual event. I’d like to thank all of them for their continued support. Bahrain’s resilient spirit is serving it well in these uncertain times as we look to build back with even more purpose than before. I am inspired by the ideas, entrepreneurialism and partnerships that are helping foster recovery and growth in Bahrain.”

The HSBC Global Economist Outlook roadshow is an annual event, which sees HSBC economists giving an update on their outlook on the global and regional economies.

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