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The economy is expected to grow at a 3% clip in 2024, according to the latest Reuters poll of twenty economists. The economists see GDP growth rebounding this year after weaker growth figures in 2023.
Lower than gov’t + IMF projections: The Finance Ministry is targeting GDP growth of 4.4% in its budget for the next fiscal year, Finance Minister Mohamed Al Jadaan said last month as he unveiled the government’s 2024 spending plans. The IMF expects the local economy to grow at a 4% clip in 2024.
There’s consensus that this year is going to be better than 2023. While analysts estimate the economy contracted 0.5% last year, the ministry suggests we eked out near-zero growth (0.03%).
FROM THE REGION-
The outlook: All six economies of the Gulf Cooperation Council (GCC) are expected to grow at an average of 3.5% in 2024, jumping up from an estimated 0.8% in 2023 , the survey showed. “For 2024, we anticipate [oil] production cuts to remain in place, which dampens the oil sector outlook and also total real GDP,” said S&P Global’s Ralf Wiegert.
Diversification is set to fuel growth in the regional bloc’s non-oil sector with expectations of the sector growing 3.6% this year “underpinned by continued investment as oil exporting countries push ahead with ambitious economic diversification programmes,” said chief economist and head of research at Emirates NBD, Khatija Haque.
The downside risk: Pundits pointed to a “challenging global outlook” as potentially weighing on GCC economies’ performance this year, thanks to a combination of high interest rates, regional tensions from the war between Israel and Hamas to the trade disruption in the Red Sea, and “an unlikely reversal in oil production cuts.”
