Despite ongoing efforts toward diversification, Saudi Arabia’s economy is projected to experience a significant boost in 2025, primarily driven by increased oil production and rising global demand, according to a recent Reuters poll of economists, who also predict robust growth for other Gulf Cooperation Council (GCC) states.

Reportedly, OPEC+, the alliance of oil-producing nations led by Russia, has been cutting oil production since late 2022 but is expected to increase output in December, potentially boosting revenues for the six GCC countries.

While crude oil prices are forecast to average $76.75 per barrel next year, up from around $74.80, Saudi Arabia, the world’s top oil exporter, is reportedly moving away from its unofficial $100-per-barrel target. This shift would enable KSA to increase production, regain market share, and fuel faster economic growth along with rising non-oil revenues.

The Reuters poll projects Saudi Arabia’s economy will expand by 4.4% in 2025, its fastest pace in three years, following an expected 1.3% growth this year.

Across the GCC, economic growth is forecast to average 4.1% next year, up from 3.7% in July’s poll and significantly higher than the 1.8% projected for 2024.

While Saudi Arabia, the UAE, and Qatar are working to diversify away from oil dependency, oil revenues will remain crucial for the region’s economies. 

The UAE is expected to lead the region in economic growth, with a projected 4.9% expansion in 2025, up from 3.7% in 2024. Qatar’s growth will rise to 2.7% in 2025 from 2.1% next year.

Qatar and the UAE are also further along in their diversification efforts and are better positioned to navigate a world approaching peak oil demand. The UAE’s non-oil sectors—such as tourism and financial services—play a larger role in its economy.

Growth for Bahrain, Kuwait, and Oman in 2025 is forecast at 2.8%, 2.5%, and 2.8%, respectively. Inflation in the region is expected to remain low, with median forecasts ranging from 0.8% to 3.0% for this year and next.