DUBAI: Economies of the Gulf Cooperation Council (GCC) will likely grow at an aggregate 2.2pc this year after a 4.8 per cent contraction last year caused by the pandemic and lower oil prices, the World Bank said yesterday.
“With recent progress made with the rollout of the Covid-19 vaccine globally and with the revival of production and trade worldwide, the prospects for an economic recovery are firmer now than at the end of last year,” it said in a research report.
“Although downside risks remain, the forecast stands for an aggregate GCC economic turnaround of 2.2pc in 2021 and an annual average growth of 3.3pc in 2022–23.”
It remains vital for GCC countries to diversify their economies, the World Bank said, as oil revenues account for over 70pc of total government revenues in most GCC countries.
It said it expects Kuwait and Qatar to introduce a value-added tax this year, following the example of other GCC states that have implemented the revenue-diversifying measure in different phases over the last few years.
On the fiscal side, most GCC countries are expected to continue to post deficits over the coming years, the World Bank said.