Credit By: Asian Lite
A research report suggests that the Gulf Cooperation Council (GCC) countries have the potential to transform into a global economic powerhouse, doubling their combined GDP from the projected $6 trillion to $13 trillion by 2050. The key driver for this growth lies in embracing a green growth strategy. The GCC’s current combined GDP has already exceeded $2 trillion, and with strategic investments in green and sustainable projects, the region could significantly boost its economic standing.
Green Growth Strategy:
- The GCC’s GDP could reach over $13 trillion by 2050 if the countries adopt a green growth strategy, marking a substantial increase from the expected $6 trillion under a business-as-usual scenario.
- The report emphasizes the transformative potential of green and sustainable projects, positioning the GCC as a global leader in economic growth.
UAE’s Commitment to Clean Energy:
- The UAE has demonstrated a commitment to clean energy with an investment of over $40 billion in the sector over the past 15 years.
- Plans involve an additional investment of $163.5 billion in clean and renewable energy sources over the next three decades, aligning with the goal of achieving net-zero emissions.
- Total Foreign Direct Investment (FDI) flow into the GCC region witnessed a decline of 17.91% in 2022, amounting to $37.12 billion, down from $45.22 billion in 2021.
- Despite the overall decline, the UAE recorded a 10% increase in FDI, reaching $22.73 billion in 2022, representing a significant share of the total FDI inflow into the GCC.
Global Recognition of UAE’s Investment Attractiveness:
- The UAE stands out globally in terms of attracting investment, ranking fourth in greenfield investment projects with 997 projects in 2023.
- FDI inflow into the UAE accounted for 61.24% of the total FDI inflow into the GCC in 2022, positioning the country as a key investment destination.
Positive Economic Outlook:
- The overall economic outlook for the GCC remains positive, driven by anticipated growth in the non-oil sector.
- Thriving industries such as hospitality, retail, travel and tourism, real estate, financial services, technology, and healthcare contribute to the optimistic economic projections.
- Both the UAE and Saudi Arabia are expected to experience robust growth, with a forecasted non-oil sector expansion of 4.8% each during the second half of 2023.
World Bank’s Economic Update:
- The World Bank emphasizes that the GCC economies have displayed resilience, achieving an average growth rate exceeding 7.0% in 2022.
- Policymakers in the GCC have successfully mitigated economic challenges, contributing to substantial GDP growth.
The GCC’s potential to become a $13 trillion global economic powerhouse by 2050 hinges on its commitment to a green growth strategy. With the UAE leading in clean energy investments and attracting significant FDI, the region is poised for transformative economic growth. The positive economic outlook, coupled with resilience in the face of challenges, positions the GCC as a critical player in global economic dynamics, particularly as it capitalizes on sustainable and green initiatives.
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