The World Bank said on Wednesday that the Gulf Cooperation Council (GCC) economies will likely grow by a total of 2.2% this year after a 4.8% contraction last year due to the pandemic and low oil prices.
“With recent progress made with the global rollout of the COVID-19 vaccine and with production and trade rebounding worldwide, the prospects for economic recovery are stronger now than they were at the end of last year,” The World Bank said in a report.
“Although downside risks remain, the forecast stands for an aggregate GCC economic turnaround of 2.2% in 2021 and an annual average growth of 3.3% in 2022–23.”
The World Bank said it remains vital for the Gulf Cooperation Council countries, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, to diversify their economies, with oil revenues accounting for more than 70% of total government revenues in most countries in the block.
Kuwait and Qatar are expected to impose value-added tax (VAT) this year, similar to other GCC countries that have implemented a revenue diversification measure at various stages over the past years.