After the 2020 recession, the MENA region is expected to witness a delicate rebound in 2021, driven in most countries by commodity prices and exports. After a regionwide average of 3.4% contraction in 2020 – excluding Egypt’s notable 3.6% GDP growth – the region’s economic growth is estimated to rise to 4% in 2021 and 3.7% in 2022.

For hydrocarbons producers, this decade might prove to be the last window for the low-cost producers to firmly re-establish their market share, particularly Saudi Arabia and Qatar. The diverging economic recoveries observed in the region in 2021 foretell a fragile financial sustainability for several MENA governments as they face the challenge of financing the growing debt and stimulus packages needed to accelerate the economic rebound in 2021 and beyond against worsening balance sheets.

On a positive note, 2020 was a record year for green financing. Since 2016, the MENA region issued a total of USD10.38 billion of green bonds, a record USD3.3 billion of which came in 2020. ESG commitments, standards and certifications are expected to remain atop national agendas from 2021 onwards in lockstep with the accelerating momentum towards green price premiums in energy, petrochemicals and other commodities.

Read the full report by Arab Petroleum Investment Corporation by clicking here