GCC stays strong, but lower oil quotas weigh on Q2 growth: ICAEW

GCC stays strong, but lower oil quotas weigh on Q2 growth: ICAEW

The Gulf Cooperation Council (GCC) countries are expected to expand moderately this year, according to the latest Economic Insight report, commissioned by the accountancy and finance body ICAEW and compiled by Oxford Economics. However, the anticipated pace of 2023 GDP growth in the region dropped to 1.9% in Q2, down from 2.8% in the previous quarter, due to the slowdown in energy output. Although growth expectations for the GCC have been revised downwards for this year, the region’s latest survey indicators reflect ongoing strength. The Q2 report reveals a slight easing in the pace of expansion since the start of the year. However, strong domestic demand continues to drive growth in employment and new orders. ICAEW’s revised oil price estimates now anticipate Brent averaging $81.5 per barrel this year, down from the previous forecast of $85 per barrel three months ago, while heightened concerns about global demand have prompted deeper production cuts from Opec+ countries. In the June meeting, Saudi Arabia voluntarily agreed to a 1mb/d production cut for the month of July, which may result in a tighter market in the latter half of the year. The updated Opec+ agreement implies a greater drag on GCC energy output growth