The expansion of tourism, finance and logistics industries in the Gulf states will not compensate for a falling oil price in the next ten years, according to a new estimate.
UK-based research firm Business Monitor estimates average GDP growth in the Gulf countries will be 3.7% a year in the next decade, down from 5.3% over the past five years.
“We expect economic growth across the Gulf Cooperation Council (GCC) to slow over the coming years as gains in the non-oil private sector fail to replace the declines in growth in the hydrocarbons economy,” says a report by the firm.
Out of the six countries in the GCC, Saudi Arabia and Oman will make the most progress in diversifying their economies in the next ten years, says Business Monitor, while Kuwait is expected to make the least progress.
Qatar’s economy is forecast to grow at 6% in the next five years, which will make it the fastest-growing Gulf state, if the firm’s estimates are true.
Business Monitor’s predictions are partly based on a forecast that the oil price will decline to a plateau of $97 a barrel from 2017 to 2020. Forecasting movements of the oil price is difficult as many unpredictable factors such as wars and political events affect the price.
©2014 funds global mena