GCC outlook downgraded due to oil output cuts

GCC outlook downgraded due to oil output cuts

Muscat: The GCC region's economic performance weakened in second quarter of 2023 as a result of the energy sector lowering oil output, reveals the latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics. The pace of GDP growth in the Middle East has therefore been downgraded by 0. 4 percentage points and is forecast to slow to just 1. 7% this year. Despite the slowdown, optimism prevails as the region's non-oil activity remains robust. According to the Q3 report, the revised economic outlook reflects the Middle East's weakened performance in Q2, driven by reduced oil production in GCC countries. Projections for GCC growth this year have been scaled back by 0. 5 percentage points to 1. 4 per cent. Nonetheless, there are encouraging indicators in the non-oil sector and domestic demand. Businesses have reported growth in their customer base and employment; however, this positive performance may face challenges due to the impending impact of high-interest rates on consumption and private investment. Growth in the region's non-energy sector is demonstrating significant resilience, primarily fueled by the tourism-related sectors, with data showing double-digit expansion in transport, storage, accommodation and food services. The tourism sector is