The Gulf Cooperation Council countries are expected to see a slight recovery in their GDP growth, reaching 2.8% in 2024 before accelerating even further to 4.7% in 2025, according to a recent report from the World Bank. The increase in GDP will be driven by an increase in oil production quotas during the second half of 2024. Oil GDP is projected to grow by 1.7% in 2024 and then rise to 6.9% in 2025.
Despite the global economic slowdown, which is expected to persist for the third consecutive year, non-oil GDP is expected to remain strong, expanding by 3.6% in 2024 and 3.5% in the medium term. This growth will be supported by expansionary fiscal policy, low interest rates, and strong consumption and private investment. Oil and gas revenues will continue to play a critical role in shaping the financial policies of the region.
Efforts to diversify non-oil revenues through taxes and fees have been ongoing, but these revenues are still not enough to offset the declines in oil revenues. Public debt levels have been managed carefully to ensure sustainability, with most countries maintaining stable ratios. The progress made in diversifying the economies of the GCC countries is evident in the performance gap between the oil and non-oil sectors. Structural reforms have been effective in enhancing consumption, private investments, and diversification in sectors such as tourism, renewable energy, financial services, and digital transformation.
In contrast to regional trends, the UAE has maintained a strong current account surplus of 9.1% of GDP due to rising non-oil tourism exports and commercial services
