ALBAWABA – The World Bank (WB) lowered its growth forecast of the Arab region’s economies in 2023 from 3.5 percent, earlier in January, to 2.2 percent on Tuesday.
According to Bloomberg, the slash is caused by the slowdown in the growth rates of oil-exporting countries in the region.
The World Bank’s report cited optimistic forecasts for 2024, raising the expected economic growth rate close to the original January estimate for 2023.
The report put the region’s growth rate at 3.3 percent for 2024, up by 0.6 percent, but estimated slower growth in 2025, at 3 percent.
Globally, the WB raised the global gross domestic product (GDP) growth rate in 2023 from 1.7 percent, estimated in January, to 2.1 percent, while lowering 2024 forecasts from 2.7 to 2.4 percent.
GDP growth in oil-exporting countries is expected to slow to 2 percent in 2023, collectively, but is forecast to recover to 3.2 percent in 2024.
The announced oil output cuts in 2023 are expected to be phased out in 2024, and they account for a large part of the forecast revision, Bloomberg reported.
Saudi Arabia’s economy is expected to slow down to 2.2 percent in 2023, from a massive 8.7 percent 2022, as oil cuts will cause stagnation in industrial production and exports.
Although Saudi will not be able to restore its 2022 growth rate levels in the next year or so, the World Bank estimates the Kingdom of Saudi Arabia will achieve a rate of 3.3 percent in 2024.
Iraq’s economy is forecast to shrink by 1.1 percent in 2023, compared to previously estimated growth of about 4 percent.
Oman will also suffer a contracting growth rate, by 2.4 percent in 2023, whereas the United Arab Emirates’ growth is expected to hit 2.8 percent. Down from 7.9 percent in 2022.
Egypt, Tunisia, and Morocco are also expected to lose economic momentum, but the loss is expected to extend well into 2024.
Egypt's economy is expected to grow at a rate of 4 percent in 2023-2024, compared to 4.5 and 4.8 percent in previous WB expectations.
The bank also lowered growth rate expectations for Morocco in 2023, from 3.5 to 2.5 percent, and reduced the expected growth rate for Tunisia from 3.3 to 2.3 percent.
