Research Briefing | Dec 14, 2022
MENA Key themes 2023: The GCC economies ended 2022 on a high note
The 2023 outlook for the Gulf Cooperation Council (GCC) region will not compare to this year’s spectacular expansion. That said, GDP in the region will grow at more than twice the pace we forecast for the global economy. We explore five themes that will shape regional performance.
What you will learn:
- Oil sector makes only a modest contribution to GCC growth – Renewed curbs on oil output mean the energy sector will barely grow next year, following double-digit expansion in 2022.
- Governments will play a key role in supporting growth – Elevated energy prices will enable governments to support economies via increased spending.
- Private sector challenged by higher borrowing costs – Although GCC has been less impacted by inflation, dollar pegs leave regional central banks facing the unpleasant prospect of having to follow the lead of the US Federal Reserve.
- GCC to remain an investor hotspot – Despite weakening growth prospects, the privatisation drive from this year will continue, cementing diversification strategies.
- “Green growth” agenda is firmly established – The energy transition will remain a key diversification theme in 2023 and beyond, though this will coexist with oil capacity expansion.
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