REGIONAL REPORT
attributed to repeated extension of voluntary OPEC + output cut . However , overall growth is projected to pick up over 2025-2026 to an average of 3.0 %, underpinned by rising oil output and ongoing reforms and investment in non-oil sectors in Oman , setting the stage for higher non-oil growth .
The GCC region is estimated to see subdued economic growth of 1.6 % in 2024 but is forecast to grow at 4.2 % in 2025-2026 continues to be driven by the non-oil sector which has shown robust growth of 3.7 %, mainly driven by 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 report .
“ The region has shown remarkable resilience in the face of global disruptions , moving steadily on its diversification agenda . It will be important to continue to exercise prudent economic policies to secure a sustainable future of growth ”, added Safaa El Tayeb El-Kogali , The World Bank GCC Country Director .
GCC countries face severe water scarcity , with renewable freshwater availability often below 100 cubic metres 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 . Key recommendations include improving water efficiency through pricing reforms , expanding wastewater reuse and using renewable energy for desalination . Strengthening governance , regional cooperation and regulatory frameworks are also vital measures .
These strategies aim to address water challenges , ease fiscal pressures and unlock economic potential .
The World Bank report provided indicators for growth per GCC country , as listed below :
Qatar : The economy is expected to grow slightly to an average of 2.4 % in 2024-2025 , reaching 4.1 % in 2025-2026 , primarily driven by increased gas production capacity . The non-oil GDP sector is anticipated to stay strong at 2.3 % in 2024 , supported by new infrastructure projects , an expanding manufacturing sector and rapidly growing tourism industry . This momentum is anticipated to strengthen further , reaching 3.4 % growth in 2025-2026 .
The hydrocarbon sector is expected to remain at 1.5 % in 2024 due to capacity constraints , but a significant boost is anticipated between Q4 2025 and 2027 with the North Field expansion .
Saudi Arabia : Following the contraction of 0.8 % in 2023 , real GDP is expected to grow by 1.1 % in 2024 , driven primarily by robust growth in non-oil activities of 4.6 %. This will partially offset the expected 6.1 % contraction in oil GDP . The contraction in the oil sector is expected due to the extension of voluntary oil production cuts to the end of November 2024 . Growth is expected to accelerate to an average of 4.7 % in 2025- 2026 as oil production increases . The non-oil sector , which is critical to Saudi Arabia ’ s economic diversification agenda , is expected to stay steady at an estimated 4.5 % in 2025-2026 .
United Arab Emirates : Economic growth is estimated to reach 3.3 % in 2024 , driven by a sustained expansion of 4.1 % in the non-oil sector . This is underpinned by robust performance across multiple sectors notably tourism , real estate , construction , transportation and manufacturing . In the medium-term , overall GDP growth is projected to accelerate to 4.1 % in 2025 and 2026 , supported by the recovery in oil production . n
Bahrain : Growth is estimated to improve in 2024 at 3.5 % from 3.0 % in the previous year . This improvement is driven by growth in a diverse range of non-oil activity , while the oil sector is expected to witness a partial recovery in 2024 , supported by higher oil production in the Abu- Safah oilfield . Over 2025-2026 , growth is projected to reach 3.3 % in line with the increase in the oil sector output .
Kuwait : Economic growth is expected to contract by 1 % in 2024 ( albeit narrower than 2023 ), largely attributed to repeated extension of voluntary OPEC + output cuts . However , it is projected to pick up over 2025-2026 to reach 2.6 %, underpinned by rising oil output in addition to an acceleration of infrastructure projects in Kuwait .
Oman : GDP growth is expected to decelerate in 2024 , also largely
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