The UAE’s economic growth will be boosted in 2022 thanks to elevated oil prices and increased crude output, according to economists.

Emirates NBD, Dubai’s largest bank, hiked the UAE’s growth forecast due to high oil prices and the capacity to increase production.

“The UAE has significant capacity to ramp up oil production from current levels of 2.9 million per day at end of January 2022. But, we expect the country will maintain the steady 20,000-30,000 barrels per day increase we have seen in recent months for the rest of this year. This implies a 10% increase in crude oil production this year relative to average 2021 output of 2.7 million bpd,” according to Khatija Haque, head of research and chief economist at Emirates NBD Research.

In addition, Emirates NBD also raised its oil GDP forecast to 10% this year from a previous 6%, but maintained the non-oil growth forecast the same at 4%. As such, headline GDP growth increased to 5.7% in 2022, from a prior 4.6%.

On Monday night, oil prices were higher with WTI Crude at 91.65 per barrel, a 0.64% rise, whilst Brent rose 0.62% to $94.12 a barrel. Oil prices have been constantly increasing since the beginning of December, when prices fell to $66.26 a barrel, reports Khaleej Times.

“Our 2023 GDP growth forecast has also increased to 6.1% from 4.9% previously, on the assumption that oil production will continue to rise to reach the UAE’s 3.5 million bpd baseline level by the end of next year. Our non-oil sector GDP forecast is unchanged at 4.5% in 2023,” Haque added within the latest note on the UAE and Gulf economies.

The International Monetary Fund last week forecast real GDP growth of 2.2% for 2021 and 3.5% for this year, as well as non-oil GDP growth of 3.2% and 3.4% for 2022 and 2023 respectively.

Furthermore, Opec+ is also predicted to increase production in 2022. “Our expectation now is that the Opec+ countries that can hit their target levels will increase production, meaning upward revisions to our oil supply growth forecasts for Saudi Arabia, the UAE and a few others,” said Edward Bell, senior director for market economics at Emirates NBD Research.