GCC Economic Growth Will Improve in 2024-2025 Thanks to Oil and Non-Oil Sectors: GCC-Stat
The Gulf Cooperation Council Statistical Centre (GCC-Stat) predicts that the economy in the GCC region will grow steadily in 2024. They expect the GDP to increase by 3.7%, mainly because of higher oil production and a recovery in non-oil industries.
GCC Growth
The economy in the Gulf Cooperation Council (GCC) is expected to grow by 4.5% in 2025, and then slow down to 3.5% in 2026. This growth will happen as OPEC+ slowly reduces production limits and new gas fields start producing. The recovery is also supported by strong growth in transportation, tourism, and infrastructure projects, as well as government spending across the Gulf countries.
The non-oil sector is expected to grow by 4.5% in 2024, keep growing at this rate into 2025, and then slow to 4.1% in 2026. This growth will be driven by private companies in areas like tourism, transportation, storage, and retail. Infrastructure projects in the region are also expected to help businesses grow.
GCC-Stat emphasized how countries are focusing on renewable energy, technology, innovation, and manufacturing to reduce dependence on oil.
The GCC’s economy grew by 0.5% in 2023 to reach $1.7 trillion. The non-oil sector grew by 3.3%. However, GDP per person decreased by 5% in 2023, going from $38,600 to $36,700.
Inflation Stabilization
Inflation in the GCC is expected to stay stable at 2.4% in 2024, 2.6% in 2025, and 2.1% in 2026. This is because of global economic policies and lower inflation pressures. Factors like better supply chains, lower oil prices, and cheaper global food helped bring inflation down to 2.2% in 2023, compared to 3.1% in 2022.
However, risks remain, including higher demand from consumers, higher wages, and more government spending due to more jobs. The report also said that the monetary policies of big economies like the United States and the European Union are helping to stabilize inflation in the region because GCC currencies are tied to the US dollar.
Outlook
The economic outlook for the GCC is positive, driven by both oil production recovery and efforts to diversify into other industries. Investment in non-oil sectors and infrastructure is expected to keep growth going, while inflation is likely to stay under control.
Key Numbers
In 2023, the GCC economies made up 2% of the world’s GDP, which was $105.4 trillion. They also made up 60.5% of the total Arab GDP, which was $3.5 trillion.
Published: 23th December 2024
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