GCC Economy Slows Down Due to World Oil Prices

A photographer takes pictures of the Khurais oil field during a tour for journalists, 150 km east-northeast of Riyadh, Saudi Arabia, June 28, 2021. The World Bank predicts a weakening of the economy in the Gulf due to continued decline in oil and gas production followed by volatile price stability.

Armfalcon.com, RIYADH — The economic growth of Saudi Arabia and the countries in the Gulf this year is predicted to only reach 2.5 percent. In fact, until next year, the projected economic growth for these countries, which incidentally are the world’s largest oil and gas producers, only reaches 3.2 percent.

The World Bank estimates that the weakening of the economy in the Gulf is due to oil and gas production which continues to decline and is followed by uncertain price stability. The oil and gas sector to the GDP of the countries in the gulf contracted by 1.3 percent after the OPEC+ decision regarding world oil and gas production policies.

“If world oil prices are at a high level, supported by looser fiscal policies, it can strengthen the economic growth of the Gulf countries,” wrote the World Bank in its report quoted from Zawya, Thursday (18/5/2023).

Although the contributors to the GDP of the Gulf countries still depend on oil and gas, the World Bank estimates that the real sector of the Gulf countries will still save the economic slowdown. The World Bank projects that the real sector GDP of the Gulf countries can grow by 2.8 percent supported by growth in the non-oil sector which can reach 4.8 percent.

Apart from Saudi Arabia, the economic slowdown was also felt in Qatar. Qatar’s GDP is predicted to slow to 3.3 percent this year. Kuwait slowed down 1.3 percent and in Bahrain it was still moderate at 2.7 percent.

“However, we estimate that the economy in Oman will continue to grow even though the pace is slow. This is the fruit of the accelerated implementation of the country’s structural reforms,” ​​said the World Bank.

source: ekonomi.republika.co.id

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