KUWAIT CITY, June 30: The Capital Economics revised its forecast for the GDP growth of the Kuwaiti economy down from 11.5% to 9.8% for the current year, and on the other hand raised its forecast for 2023 from 4.3% to 4.8%, and from 1.3% to 3.3% for the year 2024, expecting the Gulf economies to witness strong growth in the gross domestic product for the current year and the next.

Capital Economics said in its report that the rise in oil production and prices would lead to rapid growth in the gross domestic product of the region’s economies this year and next and it is likely that the Gulf GDP growth will be much higher than previous expectations. The sources stated that oil constitutes the most important economic sector for the Gulf countries, and affects the growth of their GDP through the real added value of the sector itself and the financial income achieved from crude.

The sources explained the oil sector constitutes, on average, about 35% of the real GDP of the Gulf countries. In Kuwait, oil accounts for about half of the country’s total economy. The sources pointed out that the recent OPEC+ measures to increase the production quota in July and August from 432,000 barrels per day to 648,000 barrels per day reinforced its view that the increase in oil production will support Gulf economic growth and will exceed the expectations this year and next.

“When the OPEC+ production restrictions are removed, we expect Saudi Arabia and the UAE to end their spare production capacity, and to raise oil production to its highest levels ever by the end of 2024,” say oil sources. However, Kuwait, Bahrain and Oman tend more to restrict oil production due to the lack of production surpluses.