World Economy

(P)GCC Economy to Stay Weak This Year

(P)GCC Economy to Stay Weak This Year(P)GCC Economy to Stay Weak This Year

Growth rate of (Persian) Gulf Cooperation Council countries is forecast at 2.5% in 2016, reflecting mainly the developments in the global oil market and the impact of fiscal corrective measures.

In 2017, the growth rate of this group is estimated to recover to 2.6% supported by the likely increase in international crude oil prices, according to a report on Arab economic outlook released by Arab Monetary Fund, NewsNow reported.

(P)GCC countries (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman) resorted to maintaining public spending at levels supportive of economic growth with a focus on achieving fiscal sustainability.

Other Arab oil-exporting countries are projected to grow by 3.8% in 2016 and 6.7% in 2017, provided that a relative improvement in internal conditions is achieved over the concerned period. Needless to say that expected high growth rates of this group reflect the lower base of growth in the previous years.

The report said that the uneven performance is still to remain between different groups of Arab countries. “Arab oil-exporting countries are expected to record low pace of economic growth in 2016 and 2017 compared to Arab-oil importing countries which are expected to grow at a faster pace,” noted the report.

The macroeconomic performance of Arab countries has been affected in 2015 by the persisting sluggish recovery of the world economy and international trade, as well as lower commodity prices, notably oil, whose prices in 2015 was 49% lower than that recorded in the previous year. Economic growth rate of the Arab economies as a group is estimated to reach 3.2% in 2015.

The Arab Economic Outlook report, expects the growth rate of Arab oil-exporting countries to reach 2.6% in 2016, and to recover to 3.1% in 2017.

On the other hand, Arab oil-importing economies are expected to grow 3.8% in 2016 and 4.3% in 2017, in line with expectations of gradual improvement in domestic conditions and the recovery of key economic sectors due to anticipated better performance of global economy and international trade. Furthermore, these countries will also benefit from the implementation of economic reforms aiming at increasing productivity and enhancing competitiveness.

In 2016, the growth rate of Arab countries is expected to be affected by global economic environment and the internal conditions in some Arab countries, as well as the impact of fiscal reforms.