Oman to be fastest growing GCC economy in 2023: World Bank

MUSCAT: Oman is set to become the fastest growing economy among the six GCC nations in 2023 with a 4.3 percent projected growth, according to a report by the World Bank.

The World Bank, however, predicted slowing of GDP growth across the GCC, revising its 2023 economic growth projection for the GCC downwards to 3.2%, from 3.7% forecast in October.

The report said that Oman is expected to perform better than its fellow GCC nations amid this decelerating growth scenario. It said: “In the GCC, growth is expected to slow to 3.2 per cent in 2023 and to 3.1 per cent in 2024. This comes after the GCC grew 7.3 per cent in 2022. The fastest growing economy within the GCC in 2023 is projected to be Oman, at 4.3 percent growth.”

“Despite weakening demand for oil, Oman’s relatively high growth is expected to be sustained by increased hydrocarbon production capacity, in particular aided by the development of new natural gas fields,” the report stated.

The report, titled “Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa,” said that the GCC growth will continue to outperform the wider MENA region with GDP to slow down to 3.0 percent in 2023, from 5.8 percent in 2022.

The report said that energy producers that benefited from resurgent Oil and Gas export revenues in 2022 will experience slower growth, but will fare significantly better than the rest of the region.

It said that the real GDP per capita growth is expected to slow down to 1.6 per cent in 2023 from 4.4 per cent in 2022.

The GDP growth rate of the United Arab Emirates is expected to be at 3.6 percent, followed by Qatar at 3.3 percent, Bahrain at 3.1 percent, and Saudi Arabia at 2.9 percent.

Double-digit food price inflation has been identified as the biggest driver behind the anticipated slowdown in GDP growth in the MENA region, particularly in countries that experienced currency depreciations. Eight of the 16 economies in the region suffered the impact of food price inflation, affecting poorer households that had to allocate a larger share of their income towards food.

While inflation has remained high in the region, triggered in large part by the Russia-Ukraine War, domestic inflation in Oman has remained well below global trends in 2022.