World Bank raises Oman’s economic growth forecast to 2.7% in 2024

muscat
muscat

World Bank raises Oman’s 2024 growth forecast to 2.7%

Muscat: The World Bank expects that the economic growth of the Sultanate of Oman this year will reach 2.7%, and that the growth rate in the Sultanate of Oman will rise in 2025 to reach about 2.9% in the latest report issued by the bank entitled “Global Economic Prospects.”

The report also expected that the growth rate in the GCC countries would reach 3.6% in 2024 and 3.8% in 2025, and in the Kingdom of Saudi Arabia, growth is expected to rebound due to increased oil production and exports, despite the extension of the voluntary reduction in oil production this year. At the level of other oil-exporting countries, such as Algeria and Iraq, it is expected that increased production in early 2024 will contribute to accelerating the pace of growth.

The report stated that in oil-exporting countries, the oil sector witnessed a noticeable weakness due to the reduction in production. It is estimated that the growth rate in the Gulf Cooperation Council countries has slowed sharply in 2023 due to a decline in oil production, and this slowdown has exceeded the strong activity in the non-oil sector. In other oil-exporting countries, growth rebounded in countries that were exempted from the OPEC agreement to cut production.

The report indicated that the conflict in the Middle East led to increased uncertainty about growth prospects in the region. Assuming the conflict does not escalate, the growth rate in the Middle East and North Africa region is expected to increase to 3.5% in 2024 and 2025, and forecasts have been revised upward, compared to what was expected in June, which reflects stronger than expected growth rates in oil-exporting countries, and supports this. Recovery of oil activity.

The report said that the economic prospects for the West Bank and Gaza Strip are still shrouded in a great deal of uncertainty, as growth is expected to contract by 6% in 2024, after contracting by 3.7% in 2023, and the massive destruction of fixed assets in Gaza will lead to a major contraction. for economic activity. The ongoing conflict will also exacerbate the already deteriorating economic conditions in the West Bank. If the intensity of the conflict subsides, reconstruction efforts are expected to contribute to a recovery in growth to reach 5.4% in 2025.

The report explained that the global economy is expected to record the lowest and slowest rates in a period of 5 years over a period of 30 years.

The report stated that, on the one hand, we find that the global economy is in a better position than it was a year ago, as the risks of a global recession have decreased, due in large part to the strength of the American economy, but the rising geopolitical tensions could create new risks facing the global economy in the near term. .

The report pointed out that at the same time, medium-term prospects have become bleak for many developing economies, amid slowing growth rates in most major economies, as well as a slowdown in global trade, and the most tightened financial conditions in decades.

The report indicated that global trade growth in 2024 is expected not to exceed half the average in the ten years that preceded the Corona pandemic. At the same time, he added, borrowing costs for developing economies – especially those with weak credit ratings – are likely to remain high with global interest rates remaining at their highest levels in 40 years after excluding the impact of inflation.

The report stated that global growth is also expected to slow for the third year in a row from 2.6% last year to 2.4% in 2024, about three-quarters of a percentage point lower than the average prevailing in the second decade of the twenty-first century. He added that developing economies are expected to grow by only 3.9%, a rate slightly more than one percentage point lower than the average achieved in the previous decade.

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