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The GCC is actively diversifying its economy from oil production, with the region’s economy projected to grow by 3.6% in 2024 and 3.7% in 2025, according to the World Bank’s recent Gulf Economic Update report.

The report also revealed that the GCC is set to grow by 1% in 2023 before picking up in the following two years.

“To maintain this positive trajectory, GCC countries must continue to exercise prudent macroeconomic management, stay committed to structural reforms, and focus on increasing non-oil exports,” said Safaa El Tayeb El-Kogali, World Bank Country Director for the GCC. 

“However, it is important to acknowledge the downside risks that persist. The current conflict in the Middle East poses significant risks to the region and the GCC outlook, especially if it extends or involves other regional players. As a result, global oil markets are already witnessing higher volatility.”

The report indicates that Saudi Arabia’s private sector workforce reached 2.6 million in early 2023, with the non-oil sectors expected to grow at 4.3%, while the oil sector is projected to contract by 8.4% in 2023. Consequently, the country’s overall GDP is anticipated to increase by 0.5% in 2023, followed by a recovery of 4.1% in 2024.

In Bahrain, growth is estimated to moderate by 2.8% in 2023. Kuwait is expected to witness a 0.8% decrease in economic growth in 2023, with the non-oil sector rising by 5.2%.

In Oman, overall economic progression is projected to slow down to 1.4% in 2023 due to a decline in oil output, while its non-oil sectors are expected to support growth, rising by over 2%.

Qatar’s real GDP growth is expected to decelerate to 2.8% in 2023, maintaining this rate in the medium term.

The UAE’s economic activity is anticipated to slow down to 3.4% in 2023, with its oil GDP projected to increase by 0.7% in the same year, followed by a strong recovery in 2024.