Gulf economies will receive up to $1.4 trillion in additional revenue in the next four to five years as oil prices remain high and headline inflation keeps low in the six-member economic bloc, the International Monetary Fund has said.
“We expect the oil price, compared to last year, to increase by 55 per cent, which will improve their growth prospects, but also it will be a big windfall in terms of capital flows,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told an online panel discussion on Tuesday.
“If we look at the next four to five years to give you the order of the magnitude, we are expecting more than 1tn to $1.4tn of additional revenues to oil exporting countries, especially to the GCC,” Mr Azour said.
These countries have their challenges in terms of policies and economic headwinds, but they are benefiting from the consumer price-driven headline inflation remaining low.
“Therefore, they are not suffering like other countries through the increase in basic food and commodity prices,” Mr Azour said.
The world is facing a commodities super cycle, driven by Russia’s military offensive in Ukraine, which has slowed economic growth momentum, dented global trade and exacerbated inflationary pressures.
Western sanctions on Russia, the world's second-largest energy exporter, have affected global energy supplies. Oil prices, which rose 67 per cent in 2021, rallied to a notch under $140 per barrel in March before giving up some gains. They are still up 60 per cent since last year.
Average petroleum spot prices have fluctuated between $98 and $130 per barrel since the Ukraine conflict began and are expected to settle at about $107 in 2022 — an increase of about $43 compared with an October estimate, the IMF said. They are also above the 2019 average of $61.4 a barrel.
Emirates NBD expects Brent, the benchmark for more than two thirds of global crude, to average $120 per barrel in 2022, which benefits oil exporting economies that generate a major chunk of their revenue from the sale of hydrocarbons.
Outside the GCC, other oil exporting economies in the broader Middle East and North Africa region are also receiving a boost from the rise in hydrocarbon prices, with their 2022 growth prospects improving further as they increase production volumes, the IMF said.
“They will enjoy and will lead growth in 2022,” Mr Azour said. “Even in 2021, the[ir] recovery was stronger than the other [countries] because they took the right measures in terms of the way [they fought] Covid and also accelerated the transformation of the non-oil sector.”
However, many of the regional economies are facing a sharp rise in headline inflation as their import bills to buy basic commodities swell.
Ad hoc policymaking will have to take a backseat and decision-makers should strive for structural reforms, particularly in oil importing nations, for long-term economic and fiscal stability.
Lebanon, which is going through the worst economic crisis in its history, is one such example, panellists said.
Lebanon's economy collapsed after it defaulted on about $31 billion of eurobonds in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market. Political bickering and indecision by the previous parliament forced the economy into a tailspin.
Inflation in the country has continued to surge and reached 206 per cent in April as the country elected a new parliament, which will have to put in place reforms to secure $3bn from the IMF.
“You have to restructure the banking and financial sector. You have to restructure the debt, you have to look at issues such as social protection given the large increase in the degree of poverty,” Nasser Saidi, former Lebanese economy minister and founder of consultancy Nasser Saidi & Associates, said.
“A middle income country has been reduced to a third world, or even, fourth world country in the short space of two years."
While there is "some optimism in that there is change in the political landscape”, the likelihood of the new government forcing unpopular reforms is low, he added.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Killing of Qassem Suleimani
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
PREMIER LEAGUE FIXTURES
All kick-off times UAE ( 4 GMT)
Saturday
Liverpool v Manchester United - 3.30pm
Burnley v West Ham United - 6pm
Crystal Palace v Chelsea - 6pm
Manchester City v Stoke City - 6pm
Swansea City v Huddersfield Town - 6pm
Tottenham Hotspur v Bournemouth - 6pm
Watford v Arsenal - 8.30pm
Sunday
Brighton and Hove Albion v Everton - 4.30pm
Southampton v Newcastle United - 7pm
Monday
Leicester City v West Bromwich Albion - 11pm
Slow loris biog
From: Lonely Loris is a Sunda slow loris, one of nine species of the animal native to Indonesia, Malaysia, Thailand and Singapore
Status: Critically endangered, and listed as vulnerable on the International Union for Conservation of Nature red list due to growing demand in the global exotic pet trade. It is one of the most popular primate species found at Indonesian pet markets
Likes: Sleeping, which they do for up to 18 hours a day. When they are awake, they like to eat fruit, insects, small birds and reptiles and some types of vegetation
Dislikes: Sunlight. Being a nocturnal animal, the slow loris wakes around sunset and is active throughout the night
Superpowers: His dangerous elbows. The slow loris’s doe eyes may make it look cute, but it is also deadly. The only known venomous primate, it hisses and clasps its paws and can produce a venom from its elbow that can cause anaphylactic shock and even death in humans
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
The Bio
Ram Buxani earned a salary of 125 rupees per month in 1959
Indian currency was then legal tender in the Trucial States.
He received the wages plus food, accommodation, a haircut and cinema ticket twice a month and actuals for shaving and laundry expenses
Buxani followed in his father’s footsteps when he applied for a job overseas
His father Jivat Ram worked in general merchandize store in Gibraltar and the Canary Islands in the early 1930s
Buxani grew the UAE business over several sectors from retail to financial services but is attached to the original textile business
He talks in detail about natural fibres, the texture of cloth, mirrorwork and embroidery
Buxani lives by a simple philosophy – do good to all
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Short-term let permits explained
Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
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.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Jurassic%20Park
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The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
MATCH INFO
Pakistan 106-8 (20 ovs)
Iftikhar 45, Richardson 3-18
Australia 109-0 (11.5 ovs)
Warner 48 no, Finch 52 no
Australia win series 2-0
The%20Killer
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