According to the World Bank’s “Global Economic Prospects – January 2024” report, several Middle Eastern countries are expected to experience varying levels of economic growth in the coming years. Kuwait, for instance, is projected to see its gross domestic product (GDP) grow by 2.6% in 2024 and increase to 2.7% in 2025. Similarly, Saudi Arabia is predicted to have a growth rate of 4.1% in 2024 and 4.2% in 2025, while the United Arab Emirates (UAE) is expected to see growth rates of 3.7% and 3.8% in the respective years, as reported by Al-Anba.
Bahrain is anticipated to have a growth rate of 3.3% in 2024 and 3.2% in 2025, while Oman is projected to grow by 2.7% in 2024 and 2.9% in 2025. Qatar, on the other hand, is expected to experience a decline in its economy to 2.5% in 2024, but a subsequent rise to 3.1% in 2025. It is worth noting that the ongoing conflict in the Middle East has increased uncertainty about growth expectations in the region.
However, assuming the conflict does not escalate, the growth rate in the Middle East and North Africa region is expected to rise to 3.5% by 2024 and 2025. The report also revised its forecasts upward compared to previous expectations in June, reflecting stronger-than-expected growth rates in oil-exporting countries, which supports the recovery of oil activity.
The World Bank predicts a growth rate of 3.6% in the Gulf Cooperation Council (GCC) countries in 2024, increasing to 3.8% in 2025. Factors such as increased oil production and exports are expected to contribute to the rebound in growth in countries like Saudi Arabia, despite the extension of voluntary oil production cuts. Other oil-exporting countries such as Algeria and Iraq are also expected to experience accelerated growth with increased production.
For oil-importing countries, the growth rate is projected to rise to 3.2% in 2024 and 3.7% in 2025. Djibouti, Morocco, and Tunisia are expected to see higher growth rates, but countries closer to the conflict are likely to be more affected. Egypt, for example, may face inflation problems, restricted private sector activity, and pressure on foreign transaction accounts due to a decline in tourism revenues and remittances from Egyptians abroad. Similarly, the tourism sector in Jordan is also expected to be negatively impacted by the conflict.
In the West Bank and Gaza Strip, significant uncertainty looms, and these regions are expected to experience a 6% contraction in growth in 2024, following a contraction of 3.7% in 2023. The destruction caused by the conflict in Gaza and the deteriorating economic conditions in the West Bank are major contributing factors. However, if the intensity of the conflict subsides, reconstruction efforts may lead to a recovery in growth.
In summary, the World Bank’s report paints a mixed picture for economic growth in the Middle East in 2024 and 2025. While some countries are expected to experience positive growth rates, others face challenges due to the ongoing conflict and other factors. It is crucial for policymakers and stakeholders to closely monitor these developments and take appropriate measures to foster economic stability and growth in the region.
Source: TimesKuwait
