The GDP of Kuwaiti is expected to rise to 11.5% down from 9.8% for the current year, and on the other hand the forecast for 2023 is expected for rise from 4.3% to 4.8%, and from 1.3% to 3.3% for the year 2024, says the Capital Economics in its revised forecast expecting the Gulf economies to witness strong growth in the gross domestic product for the current year and the next.
A local Arabic daily quoting Capital Economics (CE) sources said in its report that the rise in oil production and prices would lead to rapid growth in the gross domestic product of the region’s economies this year and next. And it is likely that the Gulf GDP growth will be much higher than previous expectations.
The sources stated that oil constitutes the most important economic sector for the Gulf countries, and affects the growth of their GDP through the real added value of the sector itself and the financial income achieved from crude, explaining that the oil sector constitutes, on average, about 35% of the real GDP of the Gulf countries. In Kuwait, oil accounts for about half of the country’s total economy.
The sources pointed out that the recent measures of “OPEC +” to increase the production quota in July and August from 432,000 barrels per day to 648,000 barrels per day, reinforced its view that the increase in oil production will support Gulf economic growth that exceeds expectations this year and next. +» All production restrictions on its members in the end, especially for countries that have spare production capacity.
When the “OPEC +” production restrictions are removed, “we expect Saudi Arabia and the UAE to end their spare production capacity, and to raise oil production to its highest levels ever by the end of 2024,” say the same sources.
The sources added, however, Kuwait, Bahrain and Oman tend more to restrict oil production due to the lack of production surpluses. However, we expect an increase in oil production in the three countries compared to current levels in the coming years.
Capital Economics estimated that the oil sector contributes between 2.5 and 4% on average to the GDP growth of the Gulf economies for the current year, year and next, noting that high oil prices mean that oil and gas exports to Gulf countries will be 7% higher in GDP. The total this year compared to 2021, and that this will lead to higher incomes for Gulf governments and will allow an increase in domestic demand.