QATAR. The GCC’s booming economy in recent years has created substantial demand for expatriate workers. As a result, the region has experienced a rapid growth in population. However, new forecasts from QNB Capital suggest that population growth rates are now moderating.
The total population’s compounded average growth rate (CAGR) was 5.9% in the five year period 2004-08. QNB Capital’s estimates and forecasts show the rate slowing to 3.2% between 2009-13.
Even this rate is still high compared to the global population, which is only growing at around 1.2% a year. The GCC population reached an estimated 46.8m in 2011, up sharply from 33.2m in 2004, and is forecast to rise to 49.8m in 2013.
The high rates of population growth in the GCC are a combination of natural growth amongst nationals and the net immigration of expatriate workers.
The growth of GCC nationals is forecast at 2.4% between 2009-13, down only slightly from 2.5% in the previous five years. This is double the global average, because of a youthful population, high birth rates and improving life spans due to investment in health care
Most expatriates work in the region on a short to medium term basis. Although their total is growing, the particular individuals rotate over time according to the skills required. The surge in expatriate numbers in 2004-08, when they grew at a rate of 10.8%, was linked to the boom in oil prices. This stimulated a period of rapid development in the non-oil sector which required large numbers of construction workers.
Following the brief crash in oil prices in 2009 and weaknesses in the real estate sector in places, some analysts expected trends to reverse and expatriate numbers to fall. This did not happen because the GCC economies remained buoyant, although population growth did slow sharply in some places. The expatriate population is forecast to continue to grow at steadier rate of 4.0% in 2009-13.
As a result of the slowdown in expatriate immigration, the expatriate share of the GCC population is only forecast to rise marginally, to 48.4% in 2013, up from 47.8% in 2011, compared to 37.8% in 2004.
Growth has not been even across the GCC. The UAE, Qatar and Bahrain will all represent a greater share of the regional population in 2013 than they did in 2004.
The UAE population in particular will have expanded from 11.3% of the total in 2004 to 18.2% in 2013. Qatar’s share will have increased by over a half, from 2.4% in 2004 to 3.7% in 2013. It surpassed Bahrain as the fifth most populous GCC country in 2006.
By contrast, while Saudi Arabia still represents the majority of the region’s population, its share will have declined from 68% to 61%. This is because Saudi Arabia has the highest proportion of nationals to total population in the GCC, at 67% in 2011.
Population growth has been driven by expatriate immigration and it is natural that this has been highest in the countries that have relatively small national populations relative to their oil wealth, while countries like Saudi Arabia and Oman have seem more moderate levels of expatriate growth.
The population boom that the GCC experienced during the 2000s was remarkable by global and historical standards.
The more moderate growth rates that have been observed in recent years, and which QNB Capital expects to continue, should enable the region to consolidate and catch up with the higher population levels.