The economy of the Persian Gulf Cooperation Council countries; From unprecedented growth in 2022 to stagnation in 2023

Tasnim News Agency, author: Hoda Yousefi, Persian Gulf expert – in 2022 When most of the world’s countries were still struggling with the consequences of the economic crisis caused by the corona virus epidemic, the six countries of the Persian Gulf Cooperation Council overcame this crisis and recorded significant economic growth. This year, Saudi Arabia recorded the highest annual growth rate among the G20 countries with 8.7 percent, and the average growth rate of all countries of the Persian Gulf Cooperation Council was 7.3 percent.

These countries, after overcoming the Corona crisis and the tensions that were going on in Ukraine, as well as relying on oil resources and following the increase in international demand for oil and gas and as a result, the price of a barrel of oil up to 120 dollars, have a favorable growth. achieved in their GDP. Although other factors were also involved in this; For example, Qatar’s hosting of the Football World Cup in 2022 will bring many economic benefits for this country and its neighbors..

This trend of favorable economic growth did not continue in the following year. According to the data of the World Bank, in the last year, Qatar registered a growth of 3.3%, the United Arab Emirates a growth of 2.8%, Bahrain a growth of 2.7%, Saudi Arabia a growth of 2.2%, Oman a growth of 1.5% and Kuwait an economic growth of 1.3% to average gross domestic growth. These countries registered a figure of 1.3%, far from last year, and brought recession to the Persian Gulf Cooperation Council.. /p>

What were the reasons for the stagnation in the economy of the Gulf Cooperation Council countries?

The most important factor underlying such fluctuations In energy exporting countries, their dependence is on oil and gas.This dependence causes, in addition to the written programs of each country and its foreign policy, all international events through influencing affect the energy market and their gross domestic product. This process is also true in relation to the countries of the Persian Gulf Cooperation Council. Following the global economic recession, the price of crude oil dropped from $120 to $100 per barrel in 2023, and this caused the economic growth rate of these countries to drop. 1f1f1f”>.

In addition, oil exporting countries, especially Saudi Arabia and the United Arab Emirates, as part of the latest OPEC+ agreement, to reduce their oil production by 2 million barrels. They came to a conclusion.This, along with the decrease in global oil prices, doubled the economic growth rate of the mentioned countries.

In the macro dimension, many central banks of oil-importing countries started to increase interest rates to deal with inflation, and one of the results of this was the decrease in the demand of these countries for crude oil.

Although the economic impulses caused by the Ukraine crisis were once managed by the countries of the Persian Gulf Cooperation Council, the continuation This crisis and its global political and economic consequences, along with the Gaza war and instability in the region, has created a serious disruption in the world economic order, and these countries are not immune to its results.

In addition to the impact of such crises on the energy market, the security of the region is also one of the victims of the war, which is a direct result of the reduction of foreign investment near the disputed region and, as a result, the reduction of production and export growth in countries that have a part of their economy. dependent on foreign investment..

Among other issues that can be mentioned as factors of this recession, the connection of the currencies of The countries follow the monetary system of the US dollar.In such a situation, any change in the global conditions of the US dollar will directly affect the economy of the mentioned countries. Last year, following the global recession The economy and some efforts made by emerging economies, especially China and the BRICS countries, the dominance of the US dollar on the world economy was faced with the possibility of being questioned, and as a result, the economic system of any country that tied the value of its national currency to the US dollar was affected by such conditions.

Of course, it should be noted that the countries of the Persian Gulf Cooperation Council, considering the risks of relying on oil revenues In the last decade, they have sought to diversify their economies, and this is clearly seen in the vision documents of these countries. However, any plan for sustainable development and starting The process of progress in fields such as industry and tourism requires time to achieve results, and even without considering other international factors, any long-term plan for development may initially lead to a short-term stagnation until the desired goal is reached. /span>.

Will the economic recession of the Gulf Cooperation Council countries continue in the new year? Find it?

The World Bank has predicted a growth equivalent to 3.6 percent for the countries of the Persian Gulf Cooperation Council in 2024. However, this rate of growth seems to depend on the increase in global demand for oil, the decrease in inflation and interest rates on an international scale, as well as the increase in domestic demand for energy. The favorable situation for the countries of the Persian Gulf Cooperation Council, focusing on the oil economy The title has a special potential, especially at the time of fluctuation of the energy market.

The growth of the non-oil economy with the continuation of structural reforms by the countries of the Persian Gulf Cooperation Council, strategic infrastructure investments and financial policies The facilitator is able to compensate for the losses that the economy of these countries have suffered through the energy market. Economic diversification and reducing dependence on oil revenues will bring economic stability to the above-mentioned countries, because in case of increased tensions in the region and the world, or the continuation of the global economic recession, the influence of the gross domestic product of these countries will not stop from the fluctuations of the energy market.

In addition to the negative influence of the energy market on international fluctuations, if there is sufficient attention to the non-oil aspects of the economy If not, energy exporting countries may suffer from resource curse and the profit from energy export will give the illusion of economic growth. In this case, other sectors such as agriculture, trade, industry, and tourism will remain neglected and development in the country will be incomplete. Stay.

As a result, it can be said that economic diversification is aimed at preventing the aforementioned challenge and in order to compensate for economic stagnation. Last year, it is essential for the Gulf Cooperation Council countries.

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