Economies in the Gulf Cooperation Council (GCC) are experiencing an unexpected boost in growth, with their collective GDP projected to increase by 4.4% this year. This positive outlook defies the global trend of downgraded growth forecasts, as highlighted by the World Bank’s recent reduction of its global GDP projection to 2.3% for 2025 due to trade tensions and policy uncertainty.
The primary drivers of this strong performance in the GCC are increased oil production and robust growth in non-oil sectors, particularly in the UAE and Saudi Arabia.
Key Highlights for Saudi Arabia and the UAE
- Saudi Arabia’s oil economy is now anticipated to expand by 5.2% in 2025, a significant jump from previous estimates, fueled by higher average oil output (9.7 million barrels per day). The country’s non-oil sectors are also expected to grow strongly at 5.3%, supported by positive investor sentiment and a recent credit rating upgrade to A+ by S&P.
- The UAE’s economy is set to grow by 5.1%, benefiting from a recovery in oil output and a 4.7% rise in non-oil GDP. Deepening trade relationships and a thriving tourism sector, with international visitor spending potentially contributing nearly 13% of GDP in 2025, are also key contributors to this growth.
Experts from ICAEW and Oxford Economics attribute this upgraded forecast to faster increases in OPEC+ oil output and continued momentum in non-oil activities within these key economies. They emphasize the GCC’s impressive ability to adapt to changing global trade dynamics, with strategic investments in tourism, technology, and infrastructure paying off and contributing to long-term growth and resilience.
Click here for more on Finance and Investing
