After a volatile 2017, Middle Eastern countries’ saw a sluggish Q1 2018 but was aided by rising oil prices, higher government spending and steady progress of economic reform. But as economic conditions stabilize, these countries are hopeful of steady growth in the later half of 2018.
According to the latest Economic Insight: Middle East Q2 2018 report by ICAEW and Oxford Economics, the GCC’s GDP will see a growth of 2.4% in 2018. As a result of OPEC-endorsed production cuts and heightened geopolitical tensions on oil exports, growth within the economy dipped to as low as 1% as compared to the year before—the slowest in last eight years.
An oil price rout that began in the summer of 2014 has impacted much of the Middle East’s growth prospects. Moreover, an addition of value added tax in the UAE and Saudi Arabia has also reportedly affected the consumer sentiment.
The economic downturn caused UAE’s economy to grow by only 1.5%—a seven-year low—in 2017. But the country hopes to chart a 2.6% growth in 2018, all thanks to recovering oil prices, a better fiscal position at the federal and emirate levels, a resilient trade and tourism sector and rise in investment ahead of Expo 2020 in Dubai. The UAE’s non-oil sector grew by only 3% in the past year due to negative macroeconomic environment and regional economic slowdown, but it is expected to grow by 3.7% in 2018.
On the other hand Kuwait’s GDP will rebound to 2.4% in 2018 and continue to grow to reach 3% in 2020-2021. Increased foreign direct investment and higher oil prices will help boost Kuwait’s economy, which relies on oil for 90% of its revenues.
Meanwhile Saudi Arabia, one of the largest economies in the GCC, expects to grow 1.8% this year with growth picking up in 2019.
Here is a look at the expect GDP of other Middle Eastern economics as per the report.