The World Bank predicts Kuwait’s GDP will experience a growth of 2.6% in 2024, with an expected increase to 2.7% in 2025.
This forecast reflects a significant improvement compared to the estimated 0.8% growth in 2023. In the Gulf region, Saudi Arabia is anticipated to achieve an economic growth rate of 4.1% in 2024 and 4.2% in 2025, while the UAE’s economy is expected to grow by 3.7% and 3.8% during the same periods. Other Gulf countries, including Bahrain, Oman, and Qatar, are also expected to see positive economic growth, reports Al-Anba daily.
The World Bank’s “Global Economic Prospects – January 2024” report highlights several factors contributing to the positive economic outlook in the Gulf and the Middle East, including high liquidity rates, attractive stock prices, changes in monetary policy, and positive financial results. Additionally, the formation of a new government in Kuwait is expected to focus on economic development and major projects, further supporting the positive outlook.
However, the report notes that the conflict in the Middle East has introduced increased uncertainty about regional growth expectations. The World Bank assumes that if the conflict does not escalate, the growth rate in the Middle East and North Africa could reach 3.5% in 2024 and 2025. The report also emphasizes the impact of geopolitical and policy uncertainties, weak tourism-related activity, and the exposure to natural disasters and climate change in the region.
For oil-exporting countries, a potential fall in oil prices or weakening demand could limit production, while oil-importing countries may face challenges if oil prices decline or demand weakens. The report identifies potential negative risks to growth, including the intensification of conflict, indirect effects on neighboring countries, an increase in refugees, and exposure to natural disasters.
The economic prospects for the West Bank and Gaza Strip remain uncertain, with an expected contraction of 6% in 2024, following a 3.7% contraction in 2023. Reconstruction efforts may contribute to recovery if the intensity of the conflict subsides, but ongoing challenges and destruction of fixed assets in Gaza pose significant hurdles.
The World Bank underscores the importance of monitoring geopolitical developments, potential spillover effects, and addressing the impact of the conflict on economic conditions in the region.