The Gulf Cooperation Council countries are expected to experience a strong economic recovery in the coming years, driven by an increase in oil production quotas. According to the World Bank, the GDP of these countries is projected to reach 2.8% in 2024 and accelerate further to 4.7% in 2025. Despite a global economic slowdown, oil production is expected to play a crucial role in shaping the region’s financial policies, external balances, and financial variables.
While non-oil GDP is expected to remain strong, growing by 3.6% in 2024 and 3.5% in the medium term, it will continue to be supported by expansionary fiscal policy, low interest rates, and strong consumption and private investment. However, despite efforts to diversify revenues through taxes and fees, oil and gas revenues will still play a significant role in shaping the region’s economy.
The fiscal surplus of the Gulf Cooperation Council countries is projected to shrink in 2024, reaching 0.1% of GDP while the current account surplus is projected to be 7.5% of GDP. The report highlights ongoing diversification efforts in the region with progress evident in performance discrepancies between oil and non-oil sectors. Structural reforms have enhanced consumption, private investments, and diversification across various sectors such as tourism, renewable energy, financial services, and digital transformation.
On the other hand, the UAE is expected to maintain a strong current account surplus of 9.1% of GDP due to rising non-oil tourism exports and commercial services. The UAE’s non-oil output is projected to grow by 3.2%, driven by sectors like tourism, real estate construction transportation manufacturing etc . With OPEC+ announcing an increase in oil production and a global economic recovery; this puts UAE on track for being best performing economy among gcc countries with growth reaching up to 3
