Non-oil growth across the GCC continues to show resilience despite global uncertainties, according to PwC’s latest Middle East Economy Watch report.
The report highlights strong growth rates for 2024, with the UAE at 4 per cent, Saudi Arabia at 3.7 per cent, and Oman at 3.8 per cent.
Kuwait has also returned to growth, posting a 4.7 per cent expansion in its non-oil sector.
The outlook remains positive for 2025, with expectations of further growth driven by a forecasted decline in US interest rates, allowing GCC countries to lower their rates as well.
However, fiscal uncertainties persist, as OPEC+ members agreed to delay planned production tapering amidst falling oil prices, with crude nearing $70 a barrel.
Despite these challenges, the report points to several positive developments in the region.
Key developments across the region supporting non-oil growth
Deal-making has remained robust, with 214 deals in H1 2024.
GCC countries like the UAE, Qatar, and Oman have reported fiscal surpluses, while Saudi Arabia has managed to narrow its budget deficit.
Additionally, the region is poised to capitalise on the growing AI sector, with significant investments from sovereign wealth funds and international collaborations positioning the GCC as a leader in AI innovation.
Richard Boxshall, PwC Middle East’s partner and chief economist, noted: “While oil price fluctuations remain significant, the strength of the region’s non-oil sectors provides a buffer against global volatility. Continued diversification and innovation are key to sustained growth.”
PwC’s report also highlighted Egypt’s economic recovery, fuelled by substantial support from the UAE, international organisations, and rising foreign exchange reserves.
As the GCC continues to embrace AI technologies, the region is expected to play a leading role in the global AI revolution, driven by investment and the development of key infrastructure.