The World Bank has recently updated its economic growth forecasts, indicating a more optimistic outlook for Saudi Arabia’s economy. The institution now anticipates a robust 5.9 percent expansion by 2025, a significant upgrade from the 4.2 percent growth previously estimated in January.
Despite this positive long-term forecast, the World Bank has slightly tempered expectations for 2024. The Kingdom’s gross domestic product (GDP) growth projection has been adjusted to 2.5 percent, a decrease from the initial forecast of 4.1 percent.
Meanwhile, the forecast for Gulf Cooperation Council (GCC) countries in 2024 has been revised to a slower growth of 2.8 percent, down from the earlier 3.6 percent. Yet, the outlook for 2025 has seen an uplift to 4.7 percent, surpassing the previous 3.8 percent estimate.
In the United Arab Emirates, economic growth is anticipated to climb to 3.9 percent in 2024—up from 3.7 percent—and further increase to 4.1 percent in 2025. Kuwait also shows a positive trajectory with a predicted growth of 2.8 percent in 2024 and 3.1 percent the following year.
Bahrain’s economic prospects look brighter, with expected growth rates of 3.5 percent in 2024 and 3.3 percent in 2025, marking an improvement from January’s forecasts. On the other hand, Qatar’s 2024 growth forecast has been slightly reduced to 2.1 percent but is expected to rebound to 3.2 percent in 2025.
Oman’s economy is projected to experience a slight increase of 0.1 percent for both 2024 and 2025 since the January forecast.
The revisions reflect the broader economic patterns observed in the Middle East and North Africa (MENA) following the oil price surge due to Russia’s invasion of Ukraine in 2022, which has primarily benefited oil-exporting economies.
Contrastingly, non-oil-exporting nations in the region, including several MENA oil importers, have faced decelerating growth. By 2024, the growth gap between GCC oil exporters and developing oil importers is projected to narrow to a mere 0.9 percentage points—a stark contrast to 2022 when GCC countries outpaced importers by 5.6 percentage points.
The World Bank’s report outlines that developing oil exporters will likely see a growth of 2.8 percent in 2024, a slight decrease from 3.1 percent in 2023. Similarly, growth for developing oil importers is forecasted to fall to 2.5 percent in 2024, from 3.1 percent in the preceding year.
For the MENA region as a whole, a growth rate of 2.7 percent is expected in 2024, which is consistent with pre-pandemic levels but still lags behind the global average. While other emerging markets and developing economies are also projected to remain below pre-pandemic growth rates, they are anticipated to outperform the MENA region by 1.2 percentage points in 2024.