Part 1: Economic Outlook 2021 - 2023
15
Manufacturing Sector
In regard to the recovery of manufacturing
activities, GDP data for the first three
quarters of 2021 showed that it recovered by
190%, with a big jump from negative 6.7% in
2020 to positive 6% during the first three
quarters of 2021.
However, manufacturing activities are
expected to stabilize during the fourth quarter
of 2021, which is likely expected to result in a
steady growth rate at the end of 2021 ranging
between 3.1% and 4.6% for the base and
optimistic scenarios, with the medium
scenario at 2.9%.
In relation to the degree of recovery of
activities for the manufacturing sector during
2022 and 2023, it will depend on the nature
of the activity’s inputs: it is expected that the
activities that have non-hydrocarbon inputs,
such as: building materials, foodstuffs, etc.,
will grow by the amount of the growth of local
and foreign investments to meet local
demand and the possibility of export. On the
other hand, activities whose inputs are
hydrocarbons; For example: the oil refining
and petrochemical industry, since many of its
activities have hit the peak of their production
capacity, they are anticipated to contribute at
best at stable growth rates, but with a
tendency to decline during routine
maintenance periods. Thus, it is estimated to
either stabilize between 0.2% and 0% for the
base scenario during: 2022 and 2023
respectively, or experience growth in the
same two years for the middle scenario by
less than 1% or grow more quickly in the
optimistic scenario for the same two years by
3.2 % and 2.4%, respectively.
GDP Forecasts by the Expenditure
In regard to the forecasts of GDP by
expenditure approach, it depends on
assumptions related to the current and future
developments
of
household
and
government’s final consumption expenditure,
gross capital formation, and the resource
balance (net exports and imports of goods
and services), and the impact of these on the
level of GDP during the period (2021-2023),
various combinations of these have been
applied in order to ascertain the multi-variate
factors that affect the course of changing
expenditure components, as indicated in Box
(1-3). Among the most important ones,
according to the equations used at the
present time, are: (1) the annual rate of
change for the population, (2) the current
consumption expenditure for the government
and household (private) sectors during the
organization of the 2022 FIFA World Cup,
and (3) the level of fixed capital investment
directed at and related to the construction of
the North Gas Field and its subsequent
interactions with the level of imports.
As for the level of final consumption
expenditures of households (private)
in 2021,
which have already improved from negative
10.5% in 2020 to negative 6.4%
during the
first half of 2021. It is supposed to recover
further during the second half of 2021, thanks
to the phasing out of the COVID-19
containment measures, which will lead to an
improvement in its rate of change from
negative 10.5% in 2020 to negative 2% by
the endo of 2021 in the base scenario, rising
to negative 1 % in the medium scenario, and
achieving a full recovery of 100% in the
optimistic scenario.
It is also expected to move forward towards
achieving the same consumption pattern in
2022 for the base and middle scenario, and
there is a possibility that it will achieve a
growth of 1% for the optimistic scenario due
to the expectations of the increase in
consumption resulting from hosting the 2022
World Cup, before declining by 1% in 2023
(Table (1-5)).
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