Five economic trends
The GCC is poised to navigate significant economic shifts in 2025, focusing on fiscal prudence, tax reforms, AI innovation, and urban transformation, highlighting the evolving geo-economic landscape.
In 2024, the global economy experienced moderate growth with regional variations. The U.S. outperformed expectations, expanding by 2.8% in Q3, driven by strong consumer spending and exports. Meanwhile, China’s growth is projected to slow to 4.8%, hindered by real estate challenges and weak domestic demand. Inflation is easing globally, with rates expected to decline from 6.7% in 2023 to 5.8% in 2024, providing some stability.
In the GCC, economic diversification efforts boosted non-oil sector growth, averaging 3.7% and helping offset the impact of OPEC+ production cuts, which slowed overall growth to 1.8%. Saudi Arabia, despite oil-related constraints, saw its non-oil sector grow by 3.5%.
Looking ahead to 2025, the GCC is expected to remain resilient, navigating challenges like declining oil revenues and geopolitical shifts through five key themes.
Bridge-building
Handling geo-economics division through open trade and strategic partnerships
Prudence is advised
Combining strategic sovereign borrowing with responsible fiscal management
AI infrastructure boom
Pioneering AI through significant infrastructure expenditures and international collaborations
Establishing tax parity
Harmonizing taxes by adhering to the OECD's Pillar 2 framework
Urban evolution
Promoting urban growth to establish the GCC as a premier center for talent
