Economic growth in the Gulf Cooperation Council (GCC) states, our latest edition finds, significantly weakened in 2019; overall real GDP growth is estimated to drop to 0.8% in 2019 from 2% in 2018 before gradually gradually recovering in 2020-21. This edition of the Gulf Economic Update explores the links between economic diversification and environmental sustainability. The analysis highlights the need to integrate environmental sustainability and ecosystem resilience considerations into the decision-making process on the diversification paths and options in the GCC countries.
This fourth issue finds that the Gulf Cooperation Council (GCC) region is expected to increase from 2.0% last year to 2.1% in 2019, before accelerating to 3.2% in 2020 and stabilizing at 2.7% in 2021.The report commends ongoing reforms made towards improving the business environment in the region. However, to achieve more sustainable growth, the GCC countries need to support fiscal consolidation, economic diversification, and increase private sector-led job creation, especially for women and young people. The report also focuses on enhancing human capital, which is an important task to achieve successful and sustainable economic diversification and growth. There are four approaches that can enhance human capital in the GCC if countries adopt a holistic governmental strategy to improving health and education outcomes.
The third edition of the Gulf Economic Monitor finds that a sustained increase in oil prices over the past two years has driven an economic recovery in the Gulf Cooperation Council (GCC) countries. Economic growth for the GCC region is expected to reach 2% in 2018, up from negative 0.3% in 2017, thanks in part to higher oil production and a slower pace of fiscal consolidation. However, volatility in oil prices, manifest in recent sharp declines over the past month, and continued heavy dependence on energy sector, underscore the importance of staying the course of structural reforms.
The second edition of the twice-yearly Gulf Economic Monitor describes recent economic developments and finds that regional aggregate GDP growth in 2017 weakened to just 0.5%, weighed down by oil production cuts and tighter fiscal policy that took a toll on non-oil growth. Prospects, however, are for a gradual strengthening, helped by the partial recovery in energy prices, the expiration of oil production cuts after 2018, and an easing of fiscal austerity. Aggregate growth in the region is expected to strengthen to 2.1 and 2.7% in 2018 and 2019, respectively. Risks to the outlook include potential external headwinds resulting from the tightening of monetary policy in advanced economies and/or geopolitical tensions that lead to volatility in global financial markets or commodity prices.
This edition takes a look at background issues affecting the economic outlook of the region and the overview recaps the partial recovery in global oil prices over the past year, OPEC’s decision to curb oil supply, and the effects on public finances and reform initiatives as well as banking and financial sector activities. The report visits how the fall of oil prices has affected GCC countries, and what challenges lie ahead for improving non-oil-sector economic growth in the countries. It also discusses how the World Bank provides technical assistance to the GCC countries, and what lies ahead for this partnership. Data sets for each country are provided in summary tables as well as commodity price forecasts and oil production statistics.