MUSCAT: The Gulf economy's impressive GDP figures for 2022 showcased the region's economic strength and growth, solidifying its position as an influential player in the global economy.
However, the Gulf Cooperation Council (GCC) countries are projected to face slower economic growth in 2023 due to lower oil and gas earnings and a global economic slowdown, according to the World Bank’s latest Gulf Economic Report.
The projected GDP growth for the GCC in 2023 is 2.5 per cent, a significant decrease from the remarkable 7.3 per cent growth witnessed in 2022, primarily fuelled by increased oil production.
The decline is attributed to a contraction in hydrocarbon GDP, expected to decrease by 1.3 per cent following the Opec+ production cut announcement and the global economic slowdown.
However, non-oil sectors are expected to grow at a robust rate of 4.6 per cent, driven by private consumption, fixed investments, and looser fiscal policies.
Oman's economy is forecast to grow at a slower pace of 1.5 per cent in 2023, reflecting softening global demand. The hydrocarbon sector is anticipated to contract by 3.3 per cent, but the non-oil economy is projected to grow by 3.1 per cent due to increased infrastructure projects and growth in the tourism sector.
After a stellar GDP expansion of 8.7 per cent in 2022, Saudi Arabia is projected to experience a slower growth rate of 2.2 per cent in 2023. The oil sector will contract by 2 per cent as the country complies with Opec+ agreed production cuts, but non-oil sectors are expected to grow by 4.7 per cent.
Economic growth in the UAE is projected to slow to 2.8 per cent in 2023 due to a decline in global economic activity and a contraction in oil production.
The non-oil sector is anticipated to grow strongly by 4.8 per cent, offsetting the decline in oil activities.
Qatar’s real GDP is estimated to slow down to 3.3 per cent in 2023 after a strong performance in 2022. The hydrocarbon sector is expected to expand by 0.8 per cent, while robust growth in the non-hydrocarbon sectors (4.3 per cent) will be driven by private and public consumption.
Economic growth in Kuwait is expected to slow to 1.3 per cent in 2023 due to a cautious Opec+ production approach and sluggish global economic activity.
The non-oil sectors are anticipated to grow by 4.4 per cent, primarily driven by private consumption.
Bahrain's economic outlook hinges on oil market prospects and the implementation of structural reforms. Growth is projected to moderate to 2.7 per cent in 2023, with the hydrocarbon sector contracting by 0.5% and non-hydrocarbon sectors expanding by 3.5 per cent, the report added.
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