GCC Economies Poised for 4.4% Growth in 2025, Driven by Diversification and Oil Recovery
RIYADH: The economies of the Gulf Cooperation Council (GCC) are projected to grow by 4.4% in 2025, according to a new report, fueled by a resurgence in the non-oil private sector and a rebound in oil production.
The Institute of Chartered Accountants in England and Wales (ICAEW), citing research from Oxford Economics, attributes this positive outlook to the easing of OPEC oil production cuts and the region’s intensified push toward economic diversification. This trend is particularly evident in countries like Saudi Arabia and the UAE, where the non-oil sector is gaining momentum—Saudi Arabia’s General Authority for Statistics reported a 4.9% year-on-year rise in non-oil activity in Q2 2024.
Scott Livermore, ICAEW economic adviser and chief economist at Oxford Economics Middle East, noted that the GCC’s strategic investment in non-oil sectors, along with the gradual revival of oil output, is laying a solid foundation for robust growth. “The resilience of the GCC economies is increasingly evident,” he said.
While the overall 2024 GDP growth forecast for the region has been revised slightly downward to 2.1% from 2.2%, the non-oil sector is expected to expand by 4.2% this year and 4.4% in 2025. Middle East-wide GDP growth is anticipated to reach 3.7% in 2025.
The report also highlights strong business activity across the GCC, supported by positive PMI indicators and the prospect of interest rate cuts, which are expected to stimulate both consumer spending and private sector investment. Key growth drivers include tourism, trade, and financial services.
Looking ahead, GCC governments are expected to sustain their diversification momentum, with sovereign wealth funds such as Saudi Arabia’s Public Investment Fund and UAE’s Mubadala playing pivotal roles in strategic investments. A separate PwC report noted that falling interest rates will particularly benefit regional economies tied to the US dollar, further enhancing the growth outlook.
