The World Bank lowered its forecast for the growth of the economies of the Gulf Cooperation Council to about 2.5 percent in 2023, down from 3.2 percent of its last forecast last April, but overall it raised its forecast for the economies of the region in 2024 from 3.1 percent to 3.2 percent.
As for the Kingdom of Saudi Arabia, the World Bank lowered its forecast for real GDP growth in Saudi Arabia to 2.2 percent in 2023, compared to its previous forecast of 2.9 percent last April. It also expected the inflation rate in Saudi Arabia to reach 2.4 percent in 2023.
The World Bank attributed the reasons for lowering its forecasts for the current year to the decline in hydrocarbon gross domestic product, which is expected to shrink by 1.3 percent this year, after OPEC+ announced a voluntary cut in oil production last April, in addition to the slowdown in global economic growth.
Despite its negative expectations for the GCC countries, the bank reaffirmed the strong growth in the non-oil sectors, expecting the growth to reach 4.6 percent in 2023, considering that this will reduce the impact of the declines in the activities of the hydrocarbon sector on growth.
The World Bank said that “the structural reforms undertaken in the past few years will support growth rates this year,” noting that the improvement of the business climate and competitiveness, and general improvements in the level of women’s entry into the fields of work in the GCC countries, especially in the Kingdom of Saudi Arabia, will contribute in achieving the desired returns,” calling on the countries of the region to exert more efforts aimed at achieving the desired economic diversification.