World Bank boosts Saudi Arabia’s economic growth forecast for 2025
In a surprising turn of events, the World Bank has upgraded its expectations for Saudi Arabia’s economic growth in 2025 to 5.9 percent, a significant jump from the 4.2 percent predicted earlier this year in January.
2024 Forecast Adjustments for GCC Countries
The latest report from the World Bank also revealed a downward revision for Saudi Arabia’s GDP growth forecast in 2024 to 2.5 percent, down from the previous estimate of 4.1 percent. Additionally, the overall GDP growth forecast for Gulf Cooperation Council countries in 2024 has been reduced to 2.8 percent from 3.6 percent, with a revised forecast of 4.7 percent for 2025, up from 3.8 percent.
UAE, Kuwait, Bahrain, Qatar, and Oman Economic Projections
The UAE’s GDP growth forecast for 2024 has been adjusted to 3.9 percent, higher than the previous projection of 3.7 percent, with a further increase to 4.1 percent in 2025. Kuwait is expected to see an expansion of 2.8 percent in 2024, rising to 3.1 percent in 2025. Bahrain’s economy is likely to grow by 3.5 percent in 2024 and 3.3 percent in 2025, showing an improvement from January’s forecasts. Qatar, on the other hand, experienced a downward revision for its 2024 forecast to 2.1 percent but an upward revision for 2025 to 3.2 percent. Oman’s economic projections for 2024 and 2025 saw a slight increase compared to the January forecast.
Economic Trends in the Middle East
The adjustment in economic forecasts reflects the broader trends in the region, where the surge in oil prices following Russia’s invasion of Ukraine in 2022 has bolstered oil-exporting economies in the Middle East and North Africa. However, non-oil-exporting nations in the region have experienced slower economic growth, including MENA oil importers like Djibouti, Jordan, Morocco, Tunisia, and the West Bank and Gaza.
Growth Disparity Between GCC Oil Exporters and Developing Oil Importers
By 2024, it is expected that the growth disparity between GCC oil exporters and developing oil importers will narrow to just 0.9 percentage points, a significant shift from 2022 when GCC countries grew 5.6 percentage points faster. Developing oil exporters are projected to grow by 2.8 percent in 2024, down from 3.1 percent in 2023, while growth in developing oil importers is forecasted to decrease to 2.5 percent in 2024, down from 3.1 percent in 2023.
Overall Regional and Global Growth Expectations
The MENA region is expected to achieve a growth rate of 2.7 percent in 2024, aligning with pre-COVID levels but still falling behind the global average. While other emerging markets and developing economies are also projected to remain below pre-pandemic growth rates, they are expected to surpass the MENA region by 1.2 percentage points in 2024.