In its report on economic growth prospects for the Middle East, the World Bank revealed that the economies of the Gulf states, led by Saudi Arabia, recorded the highest annual growth rate in a decade at the end of last December, thanks to higher energy prices and increased production.
The bank stated in its report that the Middle East and North Africa region witnessed a positive year, recording the highest annual growth rate in a decade, amounting to 5.7% in 2022, thanks to the rise in oil and gas prices and the increase in production volume.
The GCC countries, led by Saudi Arabia, the UAE and Kuwait, were able to increase their production and export volumes last year at the fastest pace in nearly 10 years, while maintaining inflation rates at levels well below the global average.
The World Bank lowered its growth forecasts for these countries, reflecting the expected slowdown in major trading partners, new cuts in oil production, and the repercussions of tightening monetary policy.
He expected the growth of the Saudi economy to slow down to 3.7% in 2023 and then to 2.3% in 2024, while the UAE economy would record 4.1% this year, then slow to 2.3% next year.
As for Kuwait’s economy, its growth is likely to slow to 2.5% this year and 2024, according to the World Bank.
And the bank continued: “Oil-importing countries, including Egypt and Morocco, witnessed a significant slowdown in GDP growth in the first half of last year, due to the rise in prices and the tightening of monetary policy.”
The bank suggested that growth in Egypt would continue to slow down to 4.5% in the fiscal year 2022/23 due to inflation, despite the continued benefit from previous reforms.
The bank expects the growth rate of Morocco’s economy to rise to 3.5% in 2023, and to 3.7% in 2024, as government spending will partially compensate for weak consumption, according to the bank’s expectations.
The World Bank warned of the possibility of more economic downturns and increased poverty rates in developing countries as a result of tightening monetary policy, increasing risks associated with climate change, exacerbating social tensions, and political instability, expecting the average growth of per capita income in emerging market economies and countries developing countries, by 2.8% over the next two years, which is a full percentage point lower than the average recorded for the years 2010-2019.