Forecasts by the World Bank indicate that Saudi Arabia and the UAE are poised to drive economic growth within the Gulf region in the upcoming year.
The UAE’s gross domestic product (GDP) is expected to see a 3.7% rise in the current year, with a further acceleration to 3.8% anticipated in the following year, as per the World Bank’s analysis.
Simultaneously, the global financial institution projects that Saudi Arabia will experience a 4.1% growth in its economy this year, with a slight increase to 4.2% projected for the next year.
Economic Growth in the Gulf Region
According to the World Bank’s projections, the UAE’s real GDP will witness a growth of 3.4% in 2023, which is expected to climb to 3.7% in 2024 and further to 3.8% in 2025. The comprehensive Global Economic Prospects report also forecasts an upswing in the collective GDP of the Gulf Cooperation Council (GCC) countries, with a prediction of 3.6% growth in 2024 and 3.8% in 2025, bolstered by strong performance in the non-oil sector from the previous year.
The report outlines a significant decline in the growth rate of the Middle East and North Africa (MENA) region to just 1.9% in 2023. This deceleration is attributed to various challenges, such as reductions in oil production, persistent high inflation, and subdued private sector activity in economies that are net importers of oil.
However, the World Bank anticipates a recovery in the MENA region’s growth rate, expecting it to rebound to 3.5% in both 2024 and 2025.
Last year, growth among oil-importing nations also experienced a downturn, mainly due to lackluster private sector performance. Yet, projections indicate an uptick in growth to 3.2% in the current year and to 3.7% in 2025.
Further details from the report suggest:
- Saudi Arabia’s economy is on track for a 4.1% growth this year, advancing to 4.2% the next year.
- The UAE’s GDP is set to increase by 3.7% this year, with a projection of 3.8% growth in the subsequent year.
- Bahrain’s economic growth is anticipated to reach 3.3% in 2024 and then slightly decrease to 3.2% in 2025.
- Oman’s GDP growth is estimated at 2.7% for 2024, followed by an increase to 2.9% in 2025.
- Kuwait’s economy is projected to ascend by 2.6% by the end of this year and then rise to 2.7% in the following year.
- Qatar is expected to see its economy grow by 2.5% this year, with an increase to 3.1% projected for the next year.