not less than 1.3 trillion. dollars will increase income oil producers their countries Middle East over the next four years due to skyrocketing oil prices. As indicated IMFthese countries accumulate windfall profits that increase the capital of their sovereign wealth funds and expand their opportunities.

The Gulf states host some of the richest and most dynamic sovereign wealth funds in the world. Among them are the Saudi Arabia Sovereign Wealth Fund (PIF), the Qatar Investment Authority, the Abu Dhabi investment vehicle network such as Mubadala and ADQ, and the Kuwait Investment Authority. In the second quarter, a $620 billion PIF run by Saudi Crown Prince Mohammed bin Salman invested more than $7.5 billion in US giants including Amazon, PayPal and BlackRock. PIF is expected to benefit the most from rising oil prices as Saudi Arabia estimates it will accumulate a fiscal surplus for the full year, corresponding to 5.5% of its GDP. This will be its first surplus since 2013, and GDP growth is also expected to be 7.6%, the fastest growth rate in a decade.

The means of their state investment funds are being strengthened and their opportunities are expanding.

After all, sovereign wealth funds in the Gulf showed great mobility during the first waves of the pandemic to take advantage of the big drop in stocks. During the global financial crisis, they also took advantage of the highly volatile stock markets to accumulate significant stakes in financially distressed Western companies.

In recent years, most of these sovereign funds have been focused on tech, healthcare and clean energy stocks as governments seek to combine large investment returns with diversifying their economies and developing new industries. As Jihad Azur, the IMF’s director for the Middle East and Central Asia, characteristically points out, the Gulf countries have taken advantage of this latest windfall “to invest in the future,” which is nothing short of a transition to a clean form of energy. He even urges them to accelerate the transition to such areas of the economy as high technology, because only in this way can they increase their productivity. However, he recommends that oil-producing countries in the Persian Gulf stay on track with fiscal discipline and reforms that methodically wean their economies off oil. Traditionally, the economies of the Gulf countries follow changes in oil prices, and government spending is the main driver of business activity. However, as a result, periods of explosive growth are often followed by recession. At this stage, the impressive growth in their oil revenues follows a long period of sluggish growth in all the Gulf countries, which have been forced to increase their loans and debts, draw from their foreign exchange reserves, but also slow down some investment in their plans.