Creating new perspectives since 2009

World Bank: Gulf economies to grow by 2.5% in 2023

May 18, 2023 at 1:34 pm

Crown Prince of Saudi Arabia Mohammad bin Salman al-Saud (C) attends the 43rd Gulf Cooperation Council (GCC) Summit at King Abdul Aziz International Conference Center in Riyadh, Saudi Arabia on December 09, 2022 [Royal Court of Saudi Arabia – Anadolu Agency]

The World Bank expects the economies of the Arab Gulf countries to grow by 2.5 per cent this year, given the potential decline in oil and gas revenues and a slowdown in global economic activity.

According to the World Bank Gulf Economic Update (GEU) issued yesterday, the bank said it expects GCC economies to grow at a rate of 2.5 per cent this year, and 3.2 per cent in 2024. Adding that while oil supported the growth of the GCC states’ economy last year, it will be a reason for the decline in growth this year.

The report suggests that the “weaker performance is driven primarily by lower hydrocarbon GDP, which is expected to contract by 1.3 per cent in 2023 after the OPEC+ April 2023 production cut announcement and the global economic slowdown.”

In this context, the Institute of International Finance believes that the non-oil sectors will reduce the impact of the decline in crude oil on Gulf economies in 2023.

The institute expected the non-oil sectors to grow at rates ranging between four and five per cent this year, supported by private consumption and investments.

READ: US boosts military presence in Gulf for protection from Iran