Oman to be fastest growing economy within GCC in 2023, says World Bank

Oman is set to be the fastest growing economy within the Gulf Cooperation Council (GCC) in 2023, with growth projected to reach 4.3 percent, according to a report by the World Bank.

The report also predicts that the GCC’s economic growth will slow to 3.2 percent in 2023 and 3.1 percent in 2024, after growing 7.3 percent in 2022.

The slowdown is attributed to weakening demand for oil, which is expected to decline from the high levels seen in 2022.

Oman to ‘maintain’ high growth
Despite this, Oman is expected to maintain relatively high growth due to increased hydrocarbon production capacity, aided by the development of new natural gas fields.

The government’s efforts to repair its balance sheet and reduce gross debt to 40 percent of GDP in 2022 from around 60 percent in 2021 have also contributed to the country’s positive outlook. Last week, rating agency S&P also revised Oman’s outlook to positive from stable.

The report’s projection for GCC growth is down from its October forecast of 3.7 percent to 3.2 percent, reflecting the expected decline in oil prices.

The World Bank’s chief economist for the MENA region, Roberta Gatti, said “economic growth will slow down in 2023 on a narrative that the windfall from rising oil prices will come to an end.”

Saudi Arabia, the world’s top crude exporter, is expected to experience the sharpest slowdown among the GCC economies, with growth forecast to reach 2.9 percent in 2023, down from 8.7 percent in 2022.

The UAE economy, the GCC’s second biggest, is projected to grow at 3.3 percent in 2023, down from the 4.1 percent forecast in October.

Despite the slowdown in growth, the World Bank predicts that the GCC will still outperform the wider Middle East and North Africa (MENA) region, which is forecast to grow by 3 percent in 2023, down from 5.8 percent growth in 2022.