Geopolitical tension in Eurasia has ruffled financial markets in recent weeks and contributed to the almost 20 per cent increase in oil prices since the start of 2022.
In addition, oil markets are expected to remain relatively tight in the first quarter of this year, as supply is only gradually increasing while demand growth remains robust. However, over the rest of 2022, oil demand growth is set to slow as overall demand returns to pre-pandemic levels. At the same time production is heading steadily higher from both Opec+ and non-Opec+ producers such as the US, Canada and Brazil.
Emirates NBD now expects Brent oil to average closer to $80 a barrel in 2022, up from our previous $70 forecast at the start of the year. We also now expect GCC countries to increase production by more than previously expected this year.
Both these developments are positive for GCC sovereigns. Budget balances will improve by more than previously anticipated and headline gross domestic product growth will receive a boost this year as well.
The average budget balance for the GCC is now expected to move into surplus this year, for the first time since 2014. Saudi Arabia, the UAE and Qatar could have budget surpluses above 4 per cent of GDP. Oman, which faced external financing pressures in recent years, could also post a budget surplus if its oil production targets for this year are achieved.
GDP growth in the GCC could reach 6.5 per cent this year, a marked improvement from the estimated 2.8 per cent growth achieved in 2021. However, this is almost entirely due to expected double-digit growth in oil production in the larger GCC oil producers this year, rather than any change to expectations on non-oil sector growth.
In the past, GCC governments have increased spending when oil revenue increased markedly, contributing to faster growth in the broader economy. In our view, however, governments in the region are unlikely to boost general spending as a result of the expected oil windfall in 2022 and should remain committed to diversifying both their budgets and their real economies away from oil over the coming years.
Bahrain has pushed ahead with a doubling of its VAT rate to 10 per cent this year while the UAE has announced a new corporate tax that will come into effect from mid-2023. Oman too has made significant progress with fiscal reform and is expected to continue with this strategy over the coming years.
As a result, we do not expect higher oil revenue to feed through to significantly faster non-oil sector growth in the GCC this time.
While there will probably be additional money for investment in key strategic sectors, mainly through sovereign investment funds, higher petrol prices are expected to weigh on household consumption. A faster pace of monetary tightening in the US, relative to our expectations at the start of this year, is also set to be a headwind to growth in the non-oil sectors of the GCC economies.
Overall, then, the non-oil sectors in the GCC will probably have a much more moderate rate of growth this year than the headline GDP figures suggest.
The oil windfall that now looks likely in 2022 could certainly test the resolve of GCC governments to continue to put into effect sometimes difficult and unpopular fiscal reforms. If higher oil revenue is passed on to businesses and households in the form of higher spending or increased subsidies, then this could result in faster non-oil growth than we currently expect over the next year.
On the downside, however, a correction in oil prices because of a diplomatic resolution to the Russia-Ukraine issue or a return of Iranian oil to the market could deter GCC countries from increasing oil production as expected, and weigh on headline GDP growth.
Khatija Haque is chief economist and head of research at Emirates NBD
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THE SPECS
2020 Toyota Corolla Hybrid LE
Engine: 1.8 litre combined with 16-volt electric motors
Transmission: Automatic with manual shifting mode
Power: 121hp
Torque: 142Nm
Price: Dh95,900
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Zayed Sustainability Prize
'Falling%20for%20Christmas'
The five pillars of Islam
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4.
5.
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War on waste
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Votes
Total votes: 1.8 million
Ashraf Ghani: 923,592 votes
Abdullah Abdullah: 720,841 votes
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
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Engine: 3.0-litre flat-six twin-turbocharged
Transmission: eight-speed PDK automatic
Power: 445bhp
Torque: 530Nm
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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South Africa:
JP Duminy (capt), Hashim Amla, Farhaan Behardien, Quinton de Kock (wkt), AB de Villiers, Robbie Frylinck, Beuran Hendricks, David Miller, Mangaliso Mosehle (wkt), Dane Paterson, Aaron Phangiso, Andile Phehlukwayo, Dwaine Pretorius, Tabraiz Shamsi
Bangladesh
Shakib Al Hasan (capt), Imrul Kayes, Liton Das (wkt), Mahmudullah, Mehidy Hasan, Mohammad Saifuddin, Mominul Haque, Mushfiqur Rahim (wkt), Nasir Hossain, Rubel Hossain, Sabbir Rahman, Shafiul Islam, Soumya Sarkar, Taskin Ahmed
Fixtures
Oct 26: Bloemfontein
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Profile of Whizkey
Date founded: 04 November 2017
Founders: Abdulaziz AlBlooshi and Harsh Hirani
Based: Dubai, UAE
Number of employees: 10
Sector: AI, software
Cashflow: Dh2.5 Million
Funding stage: Series A
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Global state-owned investor ranking by size
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War 2
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Sector: Additive manufacturing (aka, 3D printing)
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
