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GCC economies to rebound with 4% growth by 2025: Report
Economic growth across the GCC is forecasted to double in the 2025, anchored by recovering oil prices and booming non-oil sectors.
According to a recent ICAEW Economic Update, GCC economies are poised for a robust recovery. Growth is forecasted to rise to 4% in 2025 from 1.9% in 2024. This rebound is attributed to the stabilization of oil production and the continued expansion of non-oil sectors.
Saudi Arabia has faced an economic slowdown due to OPEC+ production cuts, with oil output averaging 9 million barrels daily. However, the report anticipates a turnaround, projecting a 4.4% growth for the Kingdom in 2025, driven by a 3.4% increase in oil production and a 4.5% surge in its growing non-energy sector.
The ICAEW Economic Update highlights that “the direct impact of Trump’s policies on GCC growth is likely to be limited in the near term,” even as renewed U.S. trade policies continue to reshape global markets. Despite these uncertainties, the UAE is set to achieve 4.5% growth in 2025, propelled by its robust non-oil sectors, including finance and construction.
The report highlights the pivotal role of non-oil industries across the GCC, which are expected to contribute to a 4% regional growth by 2025. The UAE leads this transformation, leveraging foreign investment and strategic partnerships to bolster ancillary industries. However, the GCC faced significant volatility in late 2024, influenced by rising geopolitical tensions and oil price projections dropping as low as $77.5 per barrel.
The fiscal outlook for the GCC remains optimistic, with countries like the UAE and Qatar expected to maintain budget surpluses. “We expect the GCC energy sectors to drive regional growth in 2025-26 as countries gradually increase production,” the report stated, signaling a strategic pivot toward meeting rising global energy demands and aligning with ambitious production targets in the years ahead.
On the inflation front, the region is projected to experience a rise to 2.3% in 2025, up from 1.8% in 2024. This increase is largely attributed to surging housing prices in Saudi Arabia, which are poised to exert upward pressure on costs across the GCC.
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