Economies in the six-member Gulf Cooperation Council (GCC) are expected to expand this year at the half rate of 2022 amid weak global demand outlook, according to economists from a Reuters poll on Tuesday.
Crude oil prices fell more than a third from last year’s highs, and are likely to continue under pressure this year from the concern about recession in major economies that could cut demand.
Overall growth of GCC’s countries this year was forecast at 3.3% and 2.8% next year, the Jan. 9-23 poll showed, down from 4.2% and 3.3% in the previous poll.
Economists said that despite oil output this year is expected to slow down, continued investment to boost production capacity should drive the sector to contribute positively to GDP again in 2023.
Separate Reuters poll showed that Brent crude is expected to average at $89.37 a barrel in 2023, nearly 4.6% lower than $93.65 consensus in a November survey, and lower than an average $99 per barrel last year.
In 2023, Saudi Arabia, the region’s biggest economy and top crude oil exporter, was expected to grow 3.4%, while the United Arab Emirates (UAE) was expected to grow 3.3%.
Qatar, Oman, and Bahrain were expected to grow between 2.4% to 2.7%, and Kuwait could see a growth of 1.7%.