The economy of the Arab Gulf states is slowing this year due to weak demand for oil. By Reuters

The economy of the Arab Gulf states is slowing this year due to weak demand for oil. By Reuters
The economy of the Arab Gulf states is slowing this year due to weak demand for oil. By Reuters
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© Reuters. A fuel station in Dubai in a photo from the Reuters archive.

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BENGALURU (Reuters) – A Reuters poll of economists showed that the economies of the six Gulf Cooperation Council states will grow this year at half the rate of 2022, with oil revenues hit by expectations of a moderate global slowdown.

Crude, a major driver of Gulf economies, has fallen by more than a third from last year’s highs and is expected to remain under pressure this year on fears of weak demand due to recession in major economies.

Aggregate growth in the six economies of the Gulf Cooperation Council is expected to average 3.3 percent this year and 2.8 percent next year, according to the survey, which was conducted from January 9-23, down from 4.2 percent and 3 percent. 3 percent in the previous poll.

Khadija Haq, Head of Research and Chief Economist at Emirates NBD Bank (DFM): “The outlook for 2023 is more cautious given the weaker external environment, but the GCC will likely continue to outperform many advanced economies in terms of output growth. Gross Domestic.

“While growth in oil and gas production is expected to slow this year, continued investment to boost production capacity in the region should see the sector make a positive contribution to the main GDP again in 2023,” she added.

A separate Reuters poll showed that Brent crude is expected to average 89.37 a barrel in 2023, about 4.6 percent below the average of $93.65 in a November survey, and below the average of $99 a barrel last year.

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In detail, Saudi Arabia, the largest economy in the region and the largest exporter of crude oil, is expected to grow by 3.4 percent this year and 3.1 percent in 2024, slightly outperforming the overall performance in the region as a whole. The Kingdom’s economy has previously recorded growth at a record rate of 8.8 percent in 2022.

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In the UAE, economic growth this year is expected to be 3.3 percent, down from 6.4 percent last year.

It is estimated that the economies of Qatar, Oman and Bahrain will grow at rates ranging between 2.4 and 2.7 percent in 2023, while Kuwait will grow by 1.7 percent.

Experts in the survey indicated that despite the decline in oil-related GDP growth, non-oil growth is expected to show resilience in 2023.

Analysts expected that the major economies in the Gulf region would continue to record current account surpluses, given the relatively high oil prices.

They indicated that the UAE, Qatar and Kuwait will record double-digit growth in current account surpluses in 2023, while the ratio will be in single-digits in the Sultanate of Oman and Bahrain.

With regard to inflation expectations, they were modest, but at the same time divergent, and the lowest expectations were for the Sultanate of Oman at 1.9 percent and the highest at 3.1 percent in the UAE.

(Reporting by Ali Khafagy and Marwa Gharib for the Arabic Bulletin – Edited by Duaa Muhammad)

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