The Gulf Cooperation Council (GCC) economies are expected to achieve a GDP growth of 3.7% in 2024, according to forecasts from the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat). Growth is projected to accelerate to 4.5% in 2025 before stabilising at 3.5% in 2026.
This anticipated growth is largely attributed to increased oil production as the OPEC+ alliance gradually lifts production quotas and the development of new gas fields across the region. The expansion of transportation, tourism, and infrastructure sectors, supported by expansionary fiscal policies, is also expected to contribute significantly to the region’s economic recovery.
The non-oil sector is forecasted to play a key role in driving growth, with a projected expansion of 4.5% in 2024. Growth in non-oil activities is expected to remain robust at 3.3% and 4.1% in 2025 and 2026, respectively, spurred by rising private sector activity in tourism, transportation, storage and retail. Major infrastructure projects are expected to bolster these sectors further, creating new opportunities for private sector development.
Economic diversification strategies implemented by GCC countries are anticipated to lead to significant growth in renewable energy, technology, innovation, and manufacturing industries over the forecast period.
Economic indicators
GCC-Stat reports that the GCC’s GDP at constant prices reached $1.69 trillion in 2023, reflecting a modest growth of 0.5% compared to 2022. The non-oil sector demonstrated stronger performance, recording a 3.3% growth during the year.
At current prices, the GCC’s GDP contributed 2% to the global economy, valued at $105.4 trillion in 2023, and accounted for 60.5% of the total Arab GDP, which stood at $3.5 trillion. However, per capita GDP in the GCC declined by 5% in 2023, falling from $38,600 in 2022 to $36,700.
Inflation outlook
Inflation in the GCC countries is expected to stabilise over the coming years, with rates projected at 2.4%, 2.6%, and 2.1% for 2024, 2025, and 2026, respectively. Key risks to inflation include rising consumer prices, higher costs of imported raw materials, increased public spending, and higher wages driven by improved employment rates and household incomes.
External monetary policies, including interest rate adjustments in the United States, European Union, United Kingdom, and Japan, are expected to help curb inflationary pressures within the GCC.
For 2023, the GCC recorded an inflation rate of 2.2%, down from 3.1% in 2022. This decline was attributed to improved supply chains, lower crude oil and global food prices, and the appreciation of the US dollar, which benefits GCC currencies pegged to the dollar.
The forecasts highlight the GCC’s ability to leverage its oil and non-oil sectors, fiscal policies, and diversification strategies to sustain economic growth while managing inflationary risks.
