2023-04-26 10:25:00
Gulf economy
The inflation rate in the region is expected to range between 2.1% and 3.3% this year
An opinion poll conducted by “Archyde.com” showed that the economies of the Gulf Cooperation Council countries will grow at a much slower pace in 2023 compared to last year, as their resources are affected by the decline in revenues from crude oil sales and production cuts.
Oil prices have risen by about 20% since their decline to the lowest level this year at about $70 a barrel on March 20, with the main support of the OPEC + alliance’s decision to reduce oil production by about 1.16 million barrels per day, in addition to the reopening of China.
However, the prospects for achieving more gains will be greatly weakened in the coming months due to the slowdown in global demand, which is not good news for the GCC countries that depend heavily on oil.
According to a poll conducted by “Archyde.com” from April 6 to 25 and included 16 economists, the economy of Saudi Arabia, the largest oil producer in the world, will grow 3.2% this year, less than half of its growth rate in 2022, which amounted to 8.7%.
The growth rate is expected to be the same next year.
James Swanston, an emerging markets expert at Capital Economics, said: “Oil production cuts will lead to a sharp slowdown in GDP growth in Saudi Arabia this year… In the rest of the Gulf countries, the double whammy of reducing oil production and oil prices will affect oil GDP.” and non-oil.
In the UAE, the second largest economy among the GCC countries, economic growth is expected to slow to 3.7% in 2023 and 4.0% next year, much lower than the 7.6% recorded last year.
Growth is also expected to slow in Qatar and Bahrain, to 2.7% this year, and the economy of the Sultanate of Oman to grow by 2.6% in 2023, while economic growth in Kuwait will decline at a much greater pace, to 1.5%.
The situation of the countries of the region is no exception, as growth is also expected to slow in most major economies this year in light of the impact of raising interest rates on economic activity, in addition to the impact of high inflation on consumer demand. However, inflation estimates for the Gulf countries were lower than their counterparts for many major economies.
The inflation rate in the region is expected to range between 2.1% and 3.3% this year and decline below that in 2024.
It is also expected that most economies of the Gulf Cooperation Council countries will continue to enjoy double-digit current account surpluses in 2023, despite concerns about slowing oil production. Only Oman and Bahrain are expected to post single digit surpluses.
Read also
1682523025
#Expectations #slowdown #growth #Gulf #economies #declining #oil #revenues