This latest issue finds that growth in the Gulf Cooperation Council (GCC) region is expected to increase from 2.0% last year to 2.1% in 2019, before accelerating to 3.2% in 2020 and stabilizing at 2.7% in 2021. The report commends ongoing reforms made towards improving the business environment in the region. However, to achieve more sustainable growth, the GCC countries need to support fiscal consolidation, economic diversification, and increase private sector-led job creation, especially for women and young people.
The second section of the report focuses on enhancing human capital, which is an important task to achieve successful and sustainable economic diversification and growth. There are four approaches that can enhance human capital in the GCC if countries adopt a holistic governmental strategy to improving health and education outcomes.
GCC Countries Outlook
Bahrain: Growth is projected at 2% in 2019, expected to reach 2.2% in 2020. Non-oil growth is expected to slow to 2.4%, due to front-loaded FBP fiscal measures and tapering mega-project investments. Growth will resume in the coming years as efficiency gains from reforms materialize.
Kuwait: Growth is forecast at 1.6% in 2019 due to OPEC+ oil output cuts in the first half of the year. The economy is expected to grow at around 3% by 2020 as higher government spending supports the non-oil sector.
Oman: Growth is projected to slow to 1.2% in 2019 as Oman's commitment to the December 2018 OPEC+ output cut constrains oil production. There will be a one-off spike in growth to 6% in 2020 as the government plans to significantly increase investment in the Khazzan gas field. The potential boost from the diversification investment spending would continue supporting growth in 2021 and the medium term.
Qatar: Growth is expected to reach 3% in 2019, accelerating to 3.2% in 2020 and to 3.4% by 2021, as the country continues construction operations in preparation for the 2022 World Cup. In addition, higher infrastructure spending on Qatar National Vision 2030 projects aimed at diversifying the economy should help boost investor confidence.
Saudi Arabia: Growth is expected to slow moderately to 1.7% in 2019, as higher government spending offsets the impact of oil production cuts implemented in the first half of 2019. It should then recover to over 3% in 2020 as oil production cuts are reversed, and as large infrastructure projects generate positive spillovers to private sector growth.
United Arab Emirates: Growth in the UAE is forecast at 2.6% in 2019, jumping to 3% in 2020 as the country pushes infrastructure investments ahead of Dubai¡¯s Expo 2020. Economic growth is forecast to reach 3.2% by 2021 supported by the government¡¯s economic stimulus plans, hosting Expo 2020, and improved growth prospects in trading partners.