Global economic growth projections for the Gulf Cooperation Council (GCC) regions adjusted by the World Bank due to international uncertainties.
Alright, let's break down this financial report:
The latest Al-Shall Economic Center weekly report suggests that the World Bank is worried about the increasing uncertainty in the global economy, as hinted by the International Monetary Fund. Consequently, economic growth predictions are being revised frequently.
In its April 23 report, the World Bank has revised its growth forecast for the six Gulf Cooperation Council (GCC) countries. The forecast for 2025 has been dropped by 0.9%, while a slight uptick of 0.1% is observed for 2026.
Here's the interesting bit—Saudi Arabia, the region's biggest economy, has seen its growth estimates lowered by 2.2% and 0.3% for both 2025 and 2026, respectively. The growth projections for Qatar and Kuwait have also been revised downward by 0.3% and 0.1%, respectively.
While Bahrain's 2025 forecast has been increased to 3.5%, the 2026 projection has been cut from 3.3% to 3.0%. On the positive side, the UAE and Oman have seen an upward revision in their growth forecasts.
Now, let's talk about Kuwait. The UAE is projected to have the highest growth rate for 2025 at 4.6%, while Kuwait is predicted to have the lowest at 2.2%. For 2026, Qatar leads with a forecast of 5.4%, and again, Kuwait is at the bottom with 2.7%.
The IMF reports indicate that Kuwait's share of the combined GDP of the GCC countries has declined from 11.0% in 2004 to an estimated 7.2% in 2025. This signals a significant issue with Kuwait's development model. Al-Shall argues that international financial institutions and key public and private entities agree that Kuwait's economy is the most vulnerable during global downturns and the least robust during periods of economic expansion, unless oil prices are skyrocketing.
In other words, Kuwait's dependence on oil revenues and delayed economic reforms could be the primary reasons for its lower growth compared to other GCC countries. This heavy reliance on hydrocarbon revenues and delayed reforms, coupled with OPEC+ production cuts impacting oil-dependent economies, seems to be a perfect storm for Kuwait's economy.
- The conclusive analysis by international financial entities, including the International Monetary Fund and Al-Shall Economic Center, highlights the vulnerability of Kuwait's economy, particularly in periods of global downturns and during economic expansions, as it is excessively dependent on oil revenues and has not pursued adequate economic reforms.
- The GCC countries' latest growth forecasts, as indicated in the World Bank's April 23 report, reveal a revised downward trend for Kuwait in both 2025 and 2026, with the country predicted to have the lowest growth rate among the six GCC nations.
- Businesses and financial entities must carefully consider the Kuwaiti market's future prospects, given the country's reliance on oil revenues, delayed economic reforms, and its declining share of the combined GDP of the GCC countries, as suggested by the IMF reports.
