The United Arab Emirates (UAE) and the Gulf Cooperation Council (GCC) are set to experience robust economic growth in the coming years, according to the World Bank’s Global Economic Prospects report. The report indicates positive trends in the region, driven by various factors, including rebounding oil activity. This article delves into the key economic projections for the UAE and GCC nations, highlighting the anticipated growth rates and factors contributing to the economic upturn.
UAE’s Economic Growth:
The UAE’s real gross domestic product (GDP) is expected to exhibit a significant uptick, with a projected growth rate of 3.7% in 2024, up from 3.4% in the previous year. The positive momentum is forecasted to continue into 2025, with the GDP expected to rise to 3.8%. These optimistic figures indicate a strengthening economic landscape for the UAE.
GCC Economic Landscape:
The GCC, consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, is expected to witness collective growth of 3.6% in 2024, followed by a further increase to 3.8% in 2025. The rebound in oil activity is identified as a key driver for this growth, reflecting the GCC nations’ reliance on the energy sector.
MENA Region Challenges and Recovery:
In contrast, the Middle East and North Africa (MENA) region experienced a significant slowdown in its growth rate, reaching 1.9% in 2023. Various challenges, including reduced oil production, heightened inflation, and subdued private sector performance in oil-importing nations, contributed to this deceleration. However, the MENA region is expected to recover with a projected growth rate of 3.5% in both 2024 and 2025.
Country-Specific Projections:
- Saudi Arabia:
- The largest economy in the GCC is expected to grow by 4.1% in the current year, with a further increase to 4.2% in the following year. This growth is propelled by diversification efforts and a rebound in oil prices.
- Kuwait:
- Kuwait’s economy is forecasted to expand by 2.6% in 2024, with an anticipated growth of 2.7% in 2025. These projections suggest a steady economic trajectory for the nation.
- Bahrain:
- The Bahraini economy is expected to grow by 3.3% in 2024, followed by a 3.2% growth in 2025. This positive outlook is attributed to economic reforms and increased investment.
- Qatar:
- Qatar’s economy is projected to expand by 2.5% in 2024, with an anticipated growth of 3.1% in the following year. Diversification initiatives, including preparations for the FIFA World Cup 2022, contribute to these positive projections.
- Oman:
- Oman’s economy is likely to grow by 2.7% in 2024, followed by a 2.9% increase in 2025. Government initiatives and infrastructure projects play a crucial role in driving economic growth.
The economic outlook for the UAE and GCC in 2024 and 2025 appears promising, marked by positive projections in GDP growth. The rebounding oil activity and strategic economic reforms contribute to this optimistic scenario. As the region navigates through challenges and embraces diversification efforts, it sets the stage for sustained economic development in the coming years.
