The world economy was on track for a strong, albeit uneven, recovery from COVID-19. However, the war in the Ukraine and supply-chain disruptions exacerbated by shutdowns in China due to the zero-COVID policy are dealing a serious blow to global recovery. The Gulf Cooperation Council (GCC), however, is expected to perform strongly this year. Booming hydrocarbon prices have eased pressure on fiscal balances and public sector debt and has increased current account surpluses in the GCC. Despite efforts by GCC countries, diversification is still below potential. There is progress in the non-oil economy but limited success in non-oil exports. Structural reforms must be continued to help nurture a competitive private sector. There is however an excellent and timely opportunity to diversify further the economy using a green growth strategy. The extra windfall from higher oil prices to the GCC can be used to start new high-growth, green industries that would help the economies of the region grow by an extra 3-6 percent as detailed in the Focus section of this update. The special focus section also emphasizes that there is no inherent long run trade-off between emissions reductions, economic growth, and poverty alleviation. Moving away from fossil fuels towards a greener future should not be seen as a threat but as a tremendous opportunity as the costs of renewable energy have fallen dramatically in recent years. The region already has three record-breaking, low-cost auctions for solar energy supply in Qatar, UAE, and Saudi Arabia. The region also has the potential to be a lead producer of green and blue hydrogen. With the right regulations, policies, and investments to support the transition, GCC countries can emerge with stronger, more sustainable economies that generate rewarding jobs for their youth while simultaneously protecting the planet. Finally, this report highlights potential pathways for GCC countries to benefit from and play a leading role in the global transition to a low-carbon economy.