GCC - clutches tight on net-zero transformation and focus on major investment in the energy transition

The IMF’s latest April 2022  pro-cyclical fiscal policy forecasts see a 5% spending increase in 2022, driven by Qatar and the UAE,  while Saudi Arabia and Oman, are both showing modest 4% year-on-year increases in expenditure, according to their Q1 outturns.

Richard Boxshall, Middle East Chief Economist at PwC Middle East, commented: “We have high hopes that the surge in oil prices will support the recovery of oil exporters’ countries, diversify the GCC economies and encourage the investment in other forms of energy ” “If spending is indeed controlled, the region will have a major surplus to direct to other purposes. Oman and Saudi Arabia have given the clearest indications of how they intend to use the funds. Oman’s government was directed to reduce debt, which peaked at $55bn of GDP last year. While Saudi Arabia developed the national debt management plan, giving the priority on rebuilding reserves and flowing the rest to the Public Investment Fund and the National Development Fund to finance local development projects.”

The UAE, Saudi Arabia and Oman have so far been the most aggressive in advancing hydrogen production and export, as seen in Saudi Arabia’s NEOM hydrogen project, the formation of the UAE’s Abu Dhabi Hydrogen Alliance and green hydrogen plant in Dubai, and various projects in Oman including a 3.5GW plant in Duqm. Other countries in the region - Egypt, Jordan, Kuwait and Libya - are also waking up to the hydrogen race with major hydrogen projects being planned or under development.

Stephen Anderson, Middle East Strategy and Markets Leader, commented: “ The global community has begun to take net-zero targets more seriously, and if the Middle East can proactively lead this transformation, then the 2030s are likely to be a boom decade for hydrogen in our region. A recent global study by Strategy& projected that global demand for hydrogen could reach 530m tons/year in 2050, and identified the GCC as the region with the strongest export potential.” “At PwC Middle East, we work towards achieving our net-zero goals to build trust and solve important problems for our clients and the communities we operate in. We invest in new ways of delivering transformation in the operating environment, including technological disruption, climate change and fractured geopolitics, adding to our global strategy, The New Equation.”

Established in the Middle East for over 40 years, PwC is a community of across 22 offices and 12 countries with around 7,000 people (www.pwc.com/me) who are committed to delivering quality assurance, advisory and tax services ,digitise, decarbonize, localise, privatise and modernise and provide technology powered solutions to deliver sustained outcomes and trust to add  up to The New Equation.