USOI - MENA Oil Exporters Will Benefit From Russia-Ukraine War Fallout Through Rising Petrodollar Inflows

• The MENA region, driven by large GCC oil exporters, is set to benefit from noticeably higher near-term oil and gas prices due to the Russia-Ukraine war and the implications of sanctions on Russia for global energy markets, with oil-exporting countries' governments likely to spend more to develop their economies in 2022-23.
• Real GDP growth in the MENA region as a whole (excluding Turkey) is projected to rise from an estimated 4.2% in 2021 to 5.6% in 2022 and average 4.2% in 2023, but this masks growing income differences between wealthy oil-exporting countries and fragile markets, most of which are oil-importing countries.
• The MENA region's external and fiscal accounts, on average, are likely to receive a boost from higher energy export earnings; the current-account surplus will rise to 10% of GDP in 2022-23 and the fiscal balance will move from a deficit in 2021 to moderate surpluses in 2022-23.
• While the MENA region, and especially its oil exporters, will navigate the fallout of the Russia-Ukraine war more smoothly than others, it will not escape the rising inflationary pressures (MENA inflation in high single digits in 2022) that are more an issue for oil-importing economies and will raise the risk of socioeconomic tensions and street protests.

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