Arab economies are projected to grow by 3.3 percent in 2024, up from 2.2 percent in the previous year, according to a new analysis.
In its latest report, the Arab Monetary Fund (AMF) noted that the inflation rate in its 22 member states is expected to decline to 3.3 percent this year, compared to 9.3 percent in 2023.
Developments affecting Arab economies in 2023
The report highlighted that Arab economies were significantly affected by regional and international developments in 2023, including tighter monetary policies to contain inflation and fluctuating commodity prices. Fahad Al-Turki, director general and chairman of AMF, stated that by the end of 2023, the war in Gaza and security developments in the Red Sea affected several Arab countries, adding a dimension of uncertainty about the prospects for the economies of the region and the world.
Read more: Arab economies to achieve 3.4 percent growth in 2023
Varying vulnerabilities of Arab countries
Al-Turki further added that the vulnerability of Arab countries to these developments varied according to their financial situation, the extent of their direct exposure to the developments, and the reforms undertaken by Arab countries to diversify their economies and enhance their resilience to shocks.
Global economic growth and inflation
According to the analysis, international economic growth will remain unchanged at 3.3 percent in 2024. Globally, the inflation rate is expected to slow to 5.8 percent this year, down from 6.8 percent in 2023, driven by easing supply chain disruptions and continued tight monetary policies.
Al-Turki emphasized that the AMF will continue to support Arab member countries by providing concessional financing for economic reform programs and assisting in developing human capital through training and technical support programs.
Promising outlook for the GCC region
Earlier this month, the World Bank projected that economic growth in the Gulf Cooperation Council region will expand by 2.8 percent in 2024 and 4.7 percent in 2025. With oil production quotas expected to be gradually lifted during the second half of 2024, the World Bank said oil GDP in the GCC is projected to grow by 1.7 percent this year before ramping up aggressively in 2025 to reach 6.9 percent. The international financial institution also noted that Saudi Arabia’s real gross domestic product is expected to grow by 2.5 percent in 2024, driven primarily by robust non-oil private activities, which are predicted to grow by 4.8 percent.
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