The GCC region is estimated to have subdued economic growth of 1.6% in 2024 but is forecast to grow at 4.2% in 2025-2026, according to the Fall edition of the Gulf Economic Update.
Growth continues to be driven by the non-oil sector which has shown robust growth of 3.7%, mainly driven by the ongoing diversification efforts and ambitious reforms throughout the region.
Inflation in 2024 remained low and stable at 2.1%, supported by subsidies, fuel price caps, and currency pegs. However, inflationary pressures in the housing sector persist in several countries. The fiscal sector has been impacted by rising government spending and reduced oil revenues, with significant variation across the region, said the press release of the World Bank.
GCC countries face severe water scarcity, with renewable freshwater availability often below 100 cubic meters per capita annually. This forces heavy reliance on non-renewable groundwater and energy-intensive desalination.
The Special Focus of the report “Navigating the Water Challenge in the GCC: Paths to Sustainable Solutions” highlights efforts to tackle these issues. These strategies aim to address water challenges, ease fiscal pressures, and unlock economic potential.
In the year 2024, the economic growth of Bahrain is likely to improve at 3.5%. Likewise, the Kuwaiti economic growth is expected to contract by 1% whereas Qatar’s economy is expected to grow slightly to an average of 2.4%.
Saudi Arabian GDP is expected to grow by 1.1% and the United Arab Emirates’ economic growth is estimated to reach 3.3%. But Oman GDP growth is expected to decelerate, the World Bank said.
