MUSCAT, Dec 22: The Statistical Centre for the Cooperation Council for the Arab States of the Gulf (GCC-Stat) forecasts that the gross domestic product (GDP) of the GCC countries, at constant prices, will grow by 3.7% in 2024.

The Centre anticipates that growth will continue at a higher rate in 2025, reaching 4.5%, before stabilizing at 3.5% in 2026.

This expected growth for 2024, 2025, and 2026 is largely attributed to an increase in oil production across the GCC countries, particularly as the OPEC+ alliance gradually liberalizes production quotas starting in the second half of 2024. Additionally, the development of new gas fields in the region will contribute to sustained growth, alongside the accelerated recovery of sectors such as transportation, tourism, and infrastructure projects, supported by expansionary public finance policies.

Initial forecasts by GCC-Stat also indicate improved growth in the non-oil sector, with an expected growth rate of 4.5% in 2024. This growth is projected to continue with increases of 3.3% in 2025 and 4.1% in 2026. The private sector, particularly in tourism, transportation, storage, and retail, will drive much of this growth. Furthermore, ongoing infrastructure projects in the GCC countries will enhance growth in related sectors and stimulate further private sector expansion.

The forecasts also highlight that the continued implementation of economic diversification strategies from 2024 to 2026 will lead to significant growth in key sectors, including renewable energy, technology, innovation, and manufacturing.

According to GCC-Stat, the GDP of the GCC countries at constant prices reached $1.69 trillion in 2023, reflecting a growth of 0.5% compared to 2022. The non-oil sector contributed significantly, with a growth rate of 3.3% in 2023.

However, the average per capita GDP at current prices in the GCC countries declined by 5% in 2023, falling to $36,700 from $38,600 in 2022. The GCC countries' GDP accounted for 2% of the global GDP, which totaled $105.4 trillion in 2023, and represented 60.5% of the total Arab GDP, which amounted to $3.5 trillion.

Regarding inflation, GCC-Stat forecasts that inflation rates will stabilize at 2.4% in 2024, 2.6% in 2025, and 2.1% in 2026. Potential inflationary pressures may arise from rising consumer prices, the cost of raw materials imported from outside the GCC, increased consumption, public spending, and higher wages due to improved employment rates and household incomes.

Monetary policies in major economies, including the United States, the European Union, the United Kingdom, and Japan, which are keeping interest rates high to curb inflation, are expected to help stabilize inflation rates in the GCC countries.

In 2023, the consumer price inflation rate in the GCC countries was 2.2%, down from 3.1% in 2022. This decline was due to improvements in supply chains, lower crude oil prices, a decrease in global food prices, and the strengthening of the US dollar against major currencies.

It is important to note that the currencies of the GCC countries are pegged to the US dollar.