Stable energy prices will underpin this growth, with the price for Brent crude oil fluctuating in a tight range of $50-60 per barrel.
"Opec's likely extension of production cuts, coupled with growing oil demand from emerging markets, will lead to a decline in global oil inventories, supporting oil prices in 2018," said Chris Lafakis, Moody's analytics energy economist.
"Oil prices will be capped; however, Opec countries may not adhere to production cuts. US shale oil producers will in turn ramp up oil exploration, ensuring that oil trades within a range."
Improved current account positions as a result of replenished oil reserves will support investment in non-oil sectors of the economy as the Gulf countries attempt to diversify away from dependence on hydrocarbons. In Saudi Arabia, recent anti-corruption efforts in the country underscore the commitment to the country's Vision 2030 economic transformation programme.
Meanwhile, the security and refugee concerns in the region will continue to hamper growth in other economies in the Middle East. Heightened security fears have battered tourism in Egypt, Tunisia and Jordan, while low oil prices have curbed remittances from the GCC countries.
"Regional political instability remains the main risk to the Middle Eastern and North African economies," said Juan Licari, Moody's Analytics chief international economist. "An increase in geopolitical tensions could escalate the region's refugee crisis, increase government spending on security and undermine investment."
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