GCC Economies Set for 4% Growth in 2025 Amid Oil Rebound and Diversification Drive
The Gulf Cooperation Council (GCC) economies are poised for a robust 4% growth in 2025, buoyed by a rebound in oil markets and accelerated efforts to diversify beyond hydrocarbons. As energy prices stabilize and non-oil sectors gain momentum, the region is entering a new phase of sustainable expansion.
Recent forecasts suggest that recovering global oil demand—combined with continued supply coordination by OPEC+—will support fiscal revenues across the Gulf. Brent crude is projected to average in the low $70s per barrel in 2025, providing a solid foundation for energy-exporting economies such as Saudi Arabia, the UAE, Kuwait, and Qatar to maintain stability while pursuing long-term reforms.
However, what sets the 2025 outlook apart is the growing contribution of non-oil sectors to overall GDP. From financial services and tourism to logistics, technology, and manufacturing, Gulf countries are actively executing national transformation plans aimed at reducing reliance on oil. Saudi Arabia’s Vision 2030, the UAE’s economic diversification agenda, and similar strategies across Bahrain, Oman, and Qatar are yielding results through infrastructure investments, regulatory reforms, and new industries.
For instance, Riyadh’s ambitious megaprojects—including NEOM, the Riyadh Metro, and Diriyah Gate—continue to attract global attention and investment. Meanwhile, the UAE’s thriving tourism and fintech sectors are powering growth in cities like Dubai and Abu Dhabi. Oman and Bahrain, while smaller in size, are benefiting from trade agreements, logistics expansion, and private sector development.
The fiscal environment remains a central focus. Following oil market volatility in recent years, GCC governments are maintaining disciplined spending while introducing new revenue sources such as VAT and corporate taxes. The adoption of OECD’s global minimum tax rules (GloBE) starting 2025 is expected to broaden the tax base and support financial sustainability.
Business confidence across the region is high. PwC’s latest CEO survey reveals that 90% of GCC executives expect revenue growth in 2025, outpacing global sentiment.
This optimism is rooted in a clear strategic direction, improving regulatory environments, and enhanced infrastructure.
As the GCC enters 2025, it stands on firmer economic ground—backed by stronger oil fundamentals and a bold diversification push. The projected 4% growth reflects not only a cyclical upswing in oil but also the structural transformation underway, positioning the region for long-term prosperity in a rapidly changing global economy.
