World Bank Country Director for GCC: Non-Oil Sector to Drive Saudi Growth

World Bank’s Country Director for the Gulf Cooperation Council Safaa El-Kogali
World Bank’s Country Director for the Gulf Cooperation Council Safaa El-Kogali
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World Bank Country Director for GCC: Non-Oil Sector to Drive Saudi Growth

World Bank’s Country Director for the Gulf Cooperation Council Safaa El-Kogali
World Bank’s Country Director for the Gulf Cooperation Council Safaa El-Kogali

The World Bank expects the Gulf Cooperation Council (GCC) region to grow by 2.8% in 2024 and 4.7% in 2025. This growth is driven by OPEC+ gradually increasing oil production from mid-2024 and strong non-oil economic activities.

In Saudi Arabia, the economy is predicted to grow by 2.5% this year, thanks to a booming non-oil private sector. The non-oil sector is set to grow by 4.8% in 2024, while the oil sector is expected to shrink by 0.8%.

These predictions highlight the GCC’s shift towards diversifying its economies beyond oil.

The World Bank has updated its growth forecast for the GCC region. It now expects a lower growth rate of 2.8% for this year, down from the previous estimate of 3.6%.

However, the growth outlook for next year has increased to 4.7%, up from the earlier projection of 3.7%.

Safaa El-Kogali, the World Bank’s Country Director for the GCC, told Asharq Al-Awsat that the region’s economic performance slowed to 0.7% in 2023 due to OPEC+ oil production cuts, despite strong growth in 2022.

On the other hand, non-oil sectors grew by 3.9%, thanks to ongoing reforms and diversification efforts.

El-Kogali is optimistic about the future, predicting GDP growth of 2.8% in 2024 and 4.7% in 2025. This positive outlook is due to the expected gradual increase in oil production and the continued strong performance of non-oil sectors.

Moreover, the World Bank predicted the GCC’s non-oil GDP will grow by 3.6% this year and 3.5% in the medium term, fueled by expansive fiscal policies, low interest rates, and strong private consumption and investment.

Oil GDP is expected to grow by 1.7% in 2024 and jump to 6.9% in 2025 as oil production quotas gradually increase.

Oil and gas revenues will remain critical for the region’s fiscal policies and external balances. The fiscal surplus for GCC countries is expected to narrow to 0.1% of GDP in 2024, with the current account surplus projected to be 7.5% of GDP, down from 8.4% in 2022.

El-Kogali warned of significant uncertainties and risks.

“The outlook is clouded by uncertainty and downside risks,” she said.

“The conflict in the Middle East poses substantial risks, especially if it escalates or involves other regional actors,” added El-Kogali.

“While such tensions could drive up oil prices, bringing unexpected gains for the GCC, they could also destabilize financial and trade markets and weaken economic confidence,” she explained.

El-Kogali also noted risks like slower growth in China, prolonged high interest rates, and severe climate conditions, all of which could negatively impact the region.

Assessing Saudi Arabia’s economic diversification efforts, El-Kogali said: “Saudi Arabia has already taken significant steps towards realizing its economic potential and diversifying away from oil reliance.”

“Structural reforms have been implemented over the past two years, demonstrating the Kingdom’s commitment to reform,” she asserted.

“Economic diversification lies at the heart of Vision 2030, with all efforts aimed at achieving this national goal. We see Saudi Arabia making significant progress in diversifying the real economy and increasing the contribution of non-oil sectors to GDP.”

“Improvements in public finance revenue diversification are evident, with non-oil revenue increasing from 3.5% of GDP in 2011 to 12% in 2023.”

“However, there’s room for further focus and improvement in diversifying Saudi export baskets, as non-oil exports remain modest, accounting for less than 10% of GDP,” noted El-Kogali.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.