The World Bank in its recent report Wednesday said Kuwait’s economic growth in 2023 is expected a slowdown and will reach 1.3 percent in response to the cautious approach adopted by the “OPEC Plus” to production and the slowdown in global economic activity, suggesting that the oil sector would contract by 2.2 percent this year, despite the recent operation of the Al-Zour refinery, reports Al-Rai daily.
The bank also expected the growth of the non-oil sectors in Kuwait to slow down by 4.4 percent this year, attributing the reason in the first place to private consumption, and that the uncertainty regarding policies resulting from the political stalemate leads to undermining the implementation of new infrastructure projects.
In its report on the latest economic developments in the Gulf region, which was titled: “The Health and Economic Burden of Non-Communicable Diseases in the Gulf Countries,” the World Bank suggested that inflation in Kuwait this year would decrease to 2.6 percent, compared to 4.3 percent last year, and that the surplus would reach the current account of about 22 percent of the gross domestic product, compared to 26 percent in 2022.
The report expected that the Gulf economies would grow at a slower pace in 2023 compared to the previous year due to the decline in oil and gas revenues and the slowdown in global economic activity.
Kuwait has the lowest economic growth among the GCC countries this year, and it records the third highest growth in the non-oil sectors after the UAE (4.8 percent) and Saudi Arabia (4.7 percent).
The report predicted that the economy of the Gulf countries would grow at a rate of 2.5 percent in 2023 and 3.2 percent in 2024. This comes in comparison with the remarkable growth of the region’s gross domestic product, which amounted to 7.3 percent in 2022, due to the strong increase in oil production for most of this year.
The reason for the poor performance is primarily due to the decline in the hydrocarbon gross domestic product, which is expected to contract by 1.3 percent by 2023 after the announcement of the production cut in “OPEC Plus” last April and the global economic slowdown, but the strong growth in the non-oil sectors, which It is expected to reach 4.6 percent by 2023, which will reduce deficiencies in hydrocarbon activities. The World Bank attributed this primarily to private consumption, fixed investment and the easing of fiscal policies in response to relatively higher oil revenues in 2023.
The report indicated that the structural reforms undertaken in the past few years have supported very modest growth rates this year. The improvement of the business climate and competitiveness, and general improvements in the participation of women in the labor force in the Gulf countries, especially Saudi Arabia, has led to achieving the desired returns, although more efforts must be made to achieve the desired diversity.
On the other hand, the World Bank report focused on the issue of how non-communicable diseases became the main cause of death and disease, pointing out that they are the cause of nearly 75 percent of all deaths and disabilities in the region. And he indicated that the cause of more than 80 percent of the aforementioned deaths and disability cases is due to only 4 major categories of non-communicable diseases: cardiovascular diseases, diabetes, cancer, and respiratory diseases.
A recent study published in the Journal of Medical Economics, a collaborative effort between experts at the World Bank and key stakeholders from across the Gulf countries, estimated the direct medical costs of seven major non-communicable diseases at $16.7 billion in 2019 alone. This same study found that non-communicable diseases also impose significant indirect costs on the economies of these countries, through a negative impact on human capital.
The cost of labor force productivity losses alone in Gulf economies amounted to more than $80 billion in 2019. With population aging and non-communicable diseases prevalent, these costs are expected to increase in the future rather than decline.
For his part, Issam Abu Suleiman, Regional Director of the Gulf Cooperation Council Countries Department at the World Bank, said: “Many GCC countries have already taken strong steps to address the aforementioned risk factors, including imposing taxes on tobacco products, smoke and sugary drinks, and restricting or banning advertising, promotion or sponsorship of tobacco or smoke products, and reducing the amount of salt in foods. Several Gulf states have also set themselves important environmental targets. There is an opportunity to do more to reduce non-communicable diseases and their costs in the future.”
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