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World Bank Forecasts 3.6% Growth in GCC in 2024

The World Bank launched a report on the economic updates in the GCC countries. (Asharq Al-Awsat)
The World Bank launched a report on the economic updates in the GCC countries. (Asharq Al-Awsat)
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World Bank Forecasts 3.6% Growth in GCC in 2024

The World Bank launched a report on the economic updates in the GCC countries. (Asharq Al-Awsat)
The World Bank launched a report on the economic updates in the GCC countries. (Asharq Al-Awsat)

The Gulf Cooperation Council (GCC) region is estimated to grow by 1% in 2023 before picking up again to 3.6 and 3.7 % in 2024 and 2025, respectively, according to the recently published World Bank Gulf Economic Update (GEU) report.

“The diversification efforts in the GCC region are paying off but more reforms are still needed,” said the report.

In Saudi Arabia, “the oil sector is expected to contract by 8.4 % during 2023 to reflect oil production curbs agreed within the OPEC+ alliance. Meanwhile, non-oil sectors are expected to cushion the contraction, growing at 4.3% supported by looser fiscal policy, robust private consumption, and public investment drive. As a result, overall GDP will show a contraction of 0.5% in 2023 before reporting a recovery of 4.1% in 2024 to reflect expansions of oil and non-oil sectors.”

The latest issue of the GEU report, titled “Structural Reforms and Shifting Social Norms to Increase Women’s Labor Force Participation” states that “the weaker performance this year is driven primarily by lower oil sector activities, which is expected to contract by 3.9%, to reflect OPEC+ successive production cuts and the global economic slowdown.”

“However, the reduction in oil sector activities will be compensated for by the non-oil sectors, which are expected to grow by 3.9 % in 2023 and 3.4 % in the medium term supported by sustained private consumption, strategic fixed investments, and accommodative fiscal policy”.

“To maintain this positive trajectory, GCC countries must continue to exercise prudent macroeconomic management, stay committed to structural reforms, and focus on increasing non-oil exports,” said Safaa El Tayeb El-Kogali, World Bank Country Director for the GCC.

“However, it is important to acknowledge the downside risks that persist. The current conflict in the Middle East poses significant risks to the region and the GCC outlook, especially if it extends or involves other regional players. As a result, global oil markets are already witnessing higher volatility,” El-Kogali added.

“The region has shown notable improvements in the performance of the non-oil sectors despite the downturn in oil production during most of 2023,” said Khaled Alhmoud, Senior Economist at the World Bank. “Diversification and the development of nonoil sectors has a positive impact on the creation of employment opportunities across sectors and geographic regions within the GCC.”

“The Special Focus section of the report takes a deep dive into the remarkable rise of female labor force participation (FLFP) in Saudi Arabia. Since 2017, the Kingdom has witnessed a significant increase in FLFP across all age groups and education levels. Importantly, this surge in participation did not lead to unemployment—to the contrary, unemployment rates have decreased as Saudi women have embraced job opportunities in almost every sector of the economy. This positive development was a result of an effective reform drive, started by the Kingdom’s Vision 2030, that made it significantly easier for more women to join the workforce, and shifts in social norms that were facilitated by the government’s commitment and effective communications.”

According to the GEU report, “the Saudi private sector workforce has grown steadily, reaching 2.6 million in early 2023. Additionally, the labor force participation of Saudi women more than doubled in a span of six years, from 17.4% in early 2017 to 36 % in the first quarter of 2023.”

“GCC countries have witnessed a remarkable increase in female labor force participation,” said Johannes Koettl, Senior Economist at the World Bank. “Saudi Arabia’s achievements in advancing women’s economic empowerment in just a few years is impressive and offers lessons for the MENA region and the world.”

In Qatar, “real GDP growth is estimated to slow down to 2.8 % in 2023 and continue at this rate in the medium term. Despite the weakening of the construction sector and tighter monetary policy, robust growth is anticipated in the non-hydrocarbon sectors, reaching 3.6% propelled by thriving tourist arrivals and large events. Qatar’s standing as a global sporting hub will be further reinforced by an additional 14 major sporting events during 2023. Meanwhile, the hydrocarbon sector is estimated to grow by 1.3% in 2023.”

In UAE, “economic activity is anticipated to slowdown in 2023 to 3.4% due to weaker global activity, stagnant oil output, and tighter financial conditions. Following tighter OPEC+ production quotas, oil GDP growth is projected at 0.7% in 2023 but expected to recover strongly in 2024 as production quotas are relaxed. On the other hand, non-oil output is forecast to support economic activity in 2023, growing at 4.5% with the strong performance in tourism, real estate, construction, transportation, manufacturing, and a surge in capital expenditure.”

In Bahrain, “growth is estimated to moderate to 2.8% in 2023 capped by a soft performance of the oil sector while the non-oil sector remains the key driver for growth. The hydrocarbon sector is expected to register small growth of 0.1% during 2023-24 while the non-hydrocarbon sectors will continue expanding at nearly 4% supported by the recovery in the tourism, service sectors, and the continuation of infrastructure projects.”

In Kuwait, “economic growth is projected to decelerate sharply to 0.8% in 2023 due to a decrease in oil output, monetary tightening, and sluggish global economic activity. Following tighter OPEC+ production quotas and reduced global demand, oil GDP growth is expected to contract by 3.8% in 2023 but is anticipated to recover in 2024 as production quotas are relaxed—supported by higher activity from the AlZour refinery. The non-oil sector is projected to grow by 5.2% supported by private consumption and loose fiscal policy.”

As for Oman’s economy it “is estimated to slowdown in 2023 capped by OPEC+ production cuts and slower global economic activity. However, the economy is anticipated to strengthen over the medium-term driven by higher energy production and wide-ranging structural reforms. Overall growth is projected to decelerate to 1.4% in 2023, as oil output falls, while nonoil sectors are expected to support growth, rising by over 2%, driven by the rebound in construction, investments in renewable energy, and tourism sectors.”

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Business

Arab Startups Attract Investors Despite War-Driven Uncertainty

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)
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Arab Startups Attract Investors Despite War-Driven Uncertainty

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)

At a time when geopolitical tensions and regional conflicts cast a shadow over the broader landscape, the Middle East and North Africa's startup ecosystem is showing strong resilience and the ability to attract both local and international capital.

Investment in technology is no longer a complementary option, but a strategic bet, driven by accelerating digital transformation and the stability fostered by leading governments in the region.

“The best time to invest and seize opportunities is when there is fear and uncertainty,” Hassan Haidar, founder and managing partner at Plus VC, told Asharq Al-Awsat.

The firm has backed more than 250 startups across 15 countries in the Middle East and said late last year it plans to fund around 40 startups in 2026, with a focus on deals in Saudi Arabia.

Haidar said the technology and digital services sector continues to benefit, adding that even war cannot halt the region’s rapid shift toward digital services.

Regional tensions have pushed many to rely more on digital tools and online delivery services, creating significant opportunities for startups offering innovative solutions, he said.

Venture capital surge

Startups in the region raised $3.8 billion across 688 deals in 2025, up 74% year on year, according to Magnitt company. Saudi Arabia and the United Arab Emirates took the largest share, with nearly half of the capital coming from international investors.

Haidar said investment is driven not only by current opportunities but also by the ecosystem's growing maturity.

“The past decade was about proving that venture capital can succeed in the region; the next decade will be about proving the scale of these opportunities,” he said.

Structural transformation

Haidar, who began investing in the region in 2010, said the startup landscape has changed fundamentally, from fewer than 100 startups annually across the region about 15 years ago to around 2,000 today.

Markets have become more structured, with governments supporting capital flows and helping establish local and international investment funds. Clearer paths to initial public offerings have emerged, alongside secondary transactions that provide liquidity for investors and founders.

“Markets such as Saudi Arabia and the United Arab Emirates have become regional pillars, belief in the ecosystem is attracting founders, capital and global attention,” he said.

Untapped opportunities

Haidar said the region’s appeal lies in vast untapped opportunities and in key sectors that are still in the early stages of digitization. A generation of ambitious founders with international experience is returning to build technology ventures that address both local and global challenges.

This momentum is backed by clear, strategic government support that gives investors confidence, he said.

Compared with other emerging markets, regions such as Southeast Asia face challenges in exit pathways and liquidity shortages. The Arab region, particularly Saudi Arabia, stands out by offering viable exit channels through public listings and structured secondary transactions.

Trends strengthening competitiveness

Haidar outlined four trends boosting the region’s competitiveness.

First, investors are becoming more financially mature, shifting from development-driven funding to performance-based investment focused on real returns.

Second, exit pathways are becoming more dynamic, supported by strong liquidity, with IPOs and secondary markets offering flexible options to recycle capital.

Third, artificial intelligence is moving beyond hype to real-world applications, addressing complex operational challenges in sectors such as logistics and enterprise software.

Fourth, deep tech and hardware are gaining ground, with a new wave of companies developing advanced solutions to critical issues such as energy security, water and advanced manufacturing, attracting investors willing to back long-term projects.

Challenges and outlook

Despite this progress, access to funding remains a structural challenge. Venture capital still accounts for less than 0.1% of regional GDP, compared with around 1% in the United States, highlighting significant untapped potential.

Still, Haidar expressed strong optimism about the region’s ability to move forward, pointing to the role of governments in maintaining stability.

“We hope for a positive shift and a return to normal conditions, but we strongly believe in our governments’ ability to navigate these difficult times and provide a stable environment that gives us the confidence to continue,” he said.

He said venture capital has moved beyond the stage of doubt.

“We are no longer asking whether startups are important to our economy; we have entered a new strategic phase focused on how to scale and multiply, and on proving the full potential of this ecosystem on the global stage,” he said.

Business

Many in Egypt Struggle as the Costs of a Distant War Drive up Prices in Local Markets

Cars are seen on a road at Nasr City, a suburb of Cairo, Egypt May 3, 2021. REUTERS/Mohamed Abd El Ghany
Cars are seen on a road at Nasr City, a suburb of Cairo, Egypt May 3, 2021. REUTERS/Mohamed Abd El Ghany
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Many in Egypt Struggle as the Costs of a Distant War Drive up Prices in Local Markets

Cars are seen on a road at Nasr City, a suburb of Cairo, Egypt May 3, 2021. REUTERS/Mohamed Abd El Ghany
Cars are seen on a road at Nasr City, a suburb of Cairo, Egypt May 3, 2021. REUTERS/Mohamed Abd El Ghany

Sayyed Ragheb was already struggling to keep his family afloat, earning less than $100 a month. Now he fears it will get even worse after Egypt hiked fuel prices because of the Iran war.

The father of four school-age children works day-to-day in cafes and sometimes in construction. With prices of meat and produce jumping just the past week, he worries about meeting his family’s basic needs, The AP news reported.

“This means a price increase for everything,” said Ragheb, as he served hot drinks at a cafe on a recent evening in Cairo. “This is catastrophic for someone like me.”

Egypt is one of the few countries in the Middle East not directly affected by the war, now in its third week with no sign of abating. It’s not part of the US-Israeli campaign against Iran, and it hasn’t been targeted by Iranian missile and drone fire, like Arab Gulf nations, or by Israeli bombardment, like Lebanon.

But the nation of over 108 million people is feeling the conflict’s repercussions. Soaring energy prices forced the government to implement a steep hike in the prices of subsidized fuel and cooking gas.

That is having a domino effect on the prices of other goods and services in Egypt's struggling economy. Moreover, it comes during the Muslim holy month of Ramadan, when families traditionally hold large dinner gatherings, and ahead of the holiday of Eid al-Fitr, a major shopping season when people buy new clothes, especially for children.

Egypt is vulnerable to fuel price hikes World energy prices have surged since the US and Israel launched the war on Feb. 28. Iran retaliated by attacking oil and gas infrastructure across the Persian Gulf and effectively blocking traffic through the Strait of Hormuz, where a fifth of the world's traded oil passes.

Brent crude, the international benchmark, soared from less than $70 a barrel on Feb. 27 to a peak of nearly $120 early March 9. It was hovering around $104 on Wednesday.

The jump is particularly painful for Egypt because the government dedicates a large part of its already strained budget to subsidizing gasoline, fuel and electricity.

Energy prices aren’t its only vulnerability.

Traffic through the Suez Canal, a major source of government income, had started to recover after two years of attacks on Red Sea shipping by Yemen's Houthis. Now some shipping companies are again routing traffic away from the Middle East because of the latest turmoil, and the government says it expects more losses.

Egypt, home to the ancient pyramids, also earns considerable foreign income from tourism. But arrivals are expected to plunge as travelers steer clear of the region.

If the conflict is prolonged and continues to drive up prices and reduce government revenues, the short-term economic pain could become a broader political and economic crisis, said Alexandra Blackman, an expert in Mideast politics at Cornell University.

“That will be more challenging for the regime to manage and control,” she said.

Egypt's president says the price hikes were ‘inevitable’ On March 10, the government announced a 15% hike in the price of gasoline, a 22% hike in cooking gas and a 17% hike in diesel, widely used in commercial and public transport.

President Abdel-Fattah el-Sissi acknowledged the pressure on people but said the increases are “inevitable” and “the least expensive” option to protect the economy.

“The requirements of the reality sometimes necessitate taking difficult measures ... to avert harsher options and more serious consequences,” he said over the weekend at an Iftar event, breaking the daily sunrise-to-sunset Ramadan fast.

He said Egypt’s consumption of oil products costs $20 billion annually, including fuel used to operate power plants.

The government imports 28% of its gasoline needs and 45% of its diesel needs, which puts pressure on the budget, said Petroleum Minister Karim Badawy.

The government announced a series of measures aimed at mitigating the impact, including reducing official overseas trips and tightening fuel consumption across the public sector. It also announced salary increases starting in July.

Egypt’s poor and middle class have already seen their purchasing power shrink over the past decade under government austerity measures. The measures included the slashing of subsidies and devaluation of Egypt’s currency as part of an ambitious reform program in 2016.

Inflation jumped from 10% in January to 11.5% in February of this year, according to official figures. The price increases are rippling across the economy in a country where a third of the population is below the poverty line, according to government statistics.

Since the new fuel prices took effect, the cost of meat has jumped 25% and fruit and vegetables rose 15-30%, according to merchants at three markets in Cairo.

Hussein Rashad, a grocer in a poorer district, said customers have become more selective, and most have reduced the amount of vegetables they buy. Some have stopped buying fruit altogether, he said.

“Many things have become out of their reach,” he said.

Ragheb, the cafe worker, said his family has tightened its budget, including resorting to the cheapest food staples. He won't be buying new clothes for his children for the upcoming Eid.

“One has no other option,” he said.

Business

Gold Falls 2% as Inflation Fears Bolster Hawkish Fed Bets

Gold bars after being inspected and polished at a refinery in Sydney (AFP)
Gold bars after being inspected and polished at a refinery in Sydney (AFP)
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Gold Falls 2% as Inflation Fears Bolster Hawkish Fed Bets

Gold bars after being inspected and polished at a refinery in Sydney (AFP)
Gold bars after being inspected and polished at a refinery in Sydney (AFP)

Gold prices fell to a one-month low on Wednesday as investors weighed the risk of a more hawkish US Federal Reserve policy stance, with high oil prices fuelling concerns about inflation.

Spot gold fell 2% to $4,903.19 per ounce as of 1216 GMT, its lowest level since February 18. US gold futures for April delivery also dropped 2% to $4,907.40, according to Reuters.

"Investors are worried about rates staying 'higher-for-longer' due to elevated energy prices ... the longer the Iran conflict goes on, the more likely that scenario," said Jamie Dutta, market analyst at Nemo.money.

While gold is viewed as a hedge against inflation and uncertainty, high interest rates curb its appeal by raising the cost of holding bullion and boosting returns on yield-bearing assets.
The Middle East conflict, in its third week, saw Iran target Tel Aviv with missiles in retaliation for Israel's assassination of its security chief, Ali Larijani, Iranian state television reported on Wednesday.

Benchmark Brent futures prices have been above $100 per barrel for the past four sessions.

Meanwhile, the Fed is widely expected to hold rates steady later in the day.

Investors will parse Fed Chair Jerome Powell's remarks to assess the central bank's policy view for the rest of 2026, with futures markets seeing only one quarter-percentage-point rate cut this year, in September, and another cut in late 2027.

"Long-term drivers like central bank buying, stagflation risks and diversification demand remain. That should mean higher (gold) prices by end of 2026," Dutta said.

Spot silver fell 1.2% to $78.29 per ounce, spot platinum was down 2.9% at $2,063.69, and palladium lost 2.6% to $1,560.50.