GCC economic growth expected to slow to 2.5% in 2023: World Bank

GCC economic growth expected to slow to 2.5% in 2023: World Bank

KUWAIT: The economies of the Gulf Cooperation Council (GCC) are projected to grow at a slower pace in 2023 compared to the previous year, in the face of lower oil and gas earnings and a global economic slowdown, according to the new World Bank Gulf Economic Update (GEU). The GCC is expected to grow by 2.5 percent in 2023 and 3.2 percent in 2024. This compares to the region’s remarkable GDP growth of 7.3 percent in 2022, which was fueled by a strong increase in oil production for most of that year.

Economic growth in Kuwait is expected to slow to 1.3 percent in 2023 in response to a more cautious OPEC+ production approach and sluggish global economic activity. Kuwait’s non-oil sectors are anticipated to grow by 4.4 percent in 2023 driven primarily by private consumption.

The weaker performance in the GCC is driven primarily by lower hydrocarbon GDP, which is expected to contract by 1.3 percent in 2023 after the OPEC+ April 2023 production cut announcement and the global economic slowdown. However, robust growth in the non-oil sectors, which is anticipated to reach 4.6 percent in 2023, will dampen the shortfall in hydrocarbon activities, driven primarily by private consumption, fixed investments,