Oman is set to be the fastest-growing economy among all GCC nations in 2023, as per a report issued by the World Bank, with a projected growth rate of 4.3 per cent.

This comes even after the World Bank revised its 2023 economic growth projection for the GCC downwards from its October forecast, predicting a slowing of GDP growth across the region to 3.2 per cent.

Despite this decelerating growth scenario, Oman is expected to perform better than its fellow GCC nations, according to the report. The GCC’s growth is expected to slow down to 3.2 per cent in 2023 and to 3.1 per cent in 2024 after growing 7.3 per cent in 2022.

The report also noted that Oman’s relatively high growth is expected to be sustained by increased hydrocarbon production capacity, particularly with the development of new natural gas fields.

The report, titled “Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa,” further stated that the GCC’s growth will continue to outperform the wider MENA region, but its GDP will slow down to 3 per cent in 2023 from 5.8 per cent in 2022.

The report added that energy producers that benefited from resurgent oil and gas export revenues in 2022 will experience slower growth, but will fare significantly better than the rest of the region.

In terms of real GDP per capita growth, the report predicted a slowdown to 1.6 per cent in 2023 from 4.4 per cent in 2022. The UAE’s GDP growth rate is expected to be at 3.6 per cent, followed by Qatar at 3.3 per cent, Bahrain at 3.1 per cent, and Saudi Arabia at 2.9 per cent.

The report identified double-digit food price inflation as the biggest driver behind the anticipated slowdown in GDP growth in the MENA region, particularly in countries that experienced currency depreciations.

Eight of the 16 economies in the region suffered the impact of food price inflation, affecting poorer households that had to allocate a larger share of their income towards food.

While inflation has remained high in the region, triggered in large part by the Russia-Ukraine conflict, domestic inflation in Oman has remained well below global trends in 2022.