Most Gulf Cooperation Council economies to grow at slower pace in 2025 than thought earlier: Reuters poll
BENGALURU, April 24 (Reuters) - Most Gulf Cooperation Council (GCC) economies will grow at a shallower pace this year than predicted earlier amid rising risks of a global slowdown despite higher oil production, according to a Reuters poll.
The region's economies are unlikely to be significantly affected by flip-flop U.S. tariff policies but a global economic downturn and its impact on oil demand, the region's primary revenue earner, could hamper growth.
Brent crude prices hit their lowest levels this month since the pandemic and are expected to remain subdued this year on weaker demand and higher supply.
The Organisation of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, were expected to increase oil output next month and may extend it to June.
The International Monetary Fund (IMF) recently lowered its growth forecast for Saudi Arabia, the region's largest economy, and flagged headwinds for the broader region.
The April 9-24 Reuters poll of 19 economists forecast the Saudi economy will expand 3.9% this year, a minor downgrade from 4.0% in a January poll.
"As global recession fears rise, a lower oil price would also weigh on Saudi exports and fiscal revenues...The outlook for the oil price has deteriorated considerably," noted Alina Slyusarchuk, chief CEEMEA Economist at Morgan Stanley.
"Given the weakening outlook for both the volumes and the prices of Saudi Arabia's key exports, we see downside risk to our growth forecast."
The United Arab Emirates economy will grow 4.5% this year, the poll median showed, a downgrade from 5.0% predicted in January but still the fastest in the region.
In the rest of the GCC, growth expectations for Kuwait, Qatar, Oman and Bahrain this year are projected at 2.5%, 2.7%, 2.8% and 2.8%, respectively.
"The unexpected OPEC+ decision to boost production and fears of a global slowdown owing to sweeping U.S. tariffs carry major implications for the region," wrote economists at Citi.
"We recognize that our 2025 forecasts are subject to an unusually high degree of uncertainty due to the challenging oil market dynamics and the ongoing paradigm shift in the global economy."
Inflation, which has remained stable in the region, is forecast to range between 1.2% and 2.5% this year, with the lowest in Oman and highest in Kuwait. Saudi Arabia and UAE's inflation was expected to average 2.0%, with Qatar and Bahrain at 1.5%.
(Other stories from the April Reuters global economic poll)
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