The International Monetary Fund announced that the GDP of the Gulf Cooperation Council member countries will decrease by 4.8% this year due to the disruption caused by the Islamic Republic of Iran in the Strait of Hormuz. However, it is expected that these countries will experience a 9.1% surge in their economies next year.
The impact of security challenges on the economies of the Gulf countries
The member countries of the Gulf Cooperation Council, including Kuwait, Bahrain, Saudi Arabia, Qatar, Oman, and the UAE, have faced a sharp decline in oil exports in recent months due to attacks by the Islamic Republic on energy facilities and tankers. However, recent statistics show that the oil exports of these countries have not only recovered this month but have even reached levels higher than pre-war times.
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Economic growth of Oman and countries dependent on the Strait of Hormuz
Among the mentioned countries, Oman will have a growth of 4.1% this year, but it is expected that this growth will decrease to 2.2% next year. Oman experiences a better situation due to its lack of dependence on the Strait of Hormuz for its oil exports, while Saudi Arabia and the UAE also have access to alternative routes for their oil exports from the Red Sea and the Sea of Oman.
The economies of Saudi Arabia and the UAE will shrink by 3.3% and 3.7% respectively this year, but it is expected that they will achieve growth of 7.9% and 7.7% next year. Countries dependent on the Strait of Hormuz, such as Iraq, Kuwait, and Qatar, will face a negative growth of 16% this year, but their economic growth next year will be between 17% and 19%.
In contrast, Iran, which was the only country in the "MENA" region last year to face a negative growth of 0.9%, will also experience a 7.6% decrease in GDP this year and has only predicted a 3.6% economic growth for next year.
The International Monetary Fund has emphasized that its economic forecasts are based on the normalization of security and transit conditions in the region. If the current situation continues, it is not expected that Iran will achieve significant economic growth in the coming years, while the Arab countries in the region have achieved higher levels of oil exports despite security challenges.
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