GCC region to grow by 4.2% in 2025, non-oil sector main driver: IMF regional chief

Gulf Cooperation Council countries are expected to grow by 4.2 per cent in 2025 up from about 1.2 percent this year, said Jihad Azour, director of the Middle East and Central Asia Department, at the International Monetary Fund (IMF).

The non-oil sector has been the main driver behind growth in the region which has overcome shocks and challenges.

“No doubt that the GCC countries have managed over the past years to adapt to a large number of shocks and challenges that are being witnessed in the region and the whole world. Starting from the Covid-19 pandemic and oil shocks, GCC countries have maintained a certain level of growth despite the fact that there was the Opec+ and its agreements,” Azour said during a media briefing after the launch of the World Economic Outlook’s (WEO) report.

For 2024, he said, projections are better than last year.

“This is very important if we put this in the framework of the fact that the main driving force behind the growth in the GCC countries is the development of the non-oil economy. The development of non-oil economy was a main leverage for growth and the Gulf countries maintained a good growth ranging between three to four per cent for non-oil growth,” IMF’s regional director said.

In its October edition of the World Economic Outlook, IMF increased the UAE’s growth forecast for next year by 0.9 per cent to 5.1 per cent on the back of strong growth in non-oil sectors and steady crude prices.

In May 2024, the IMF also hiked the overall real GDP growth forecast of the UAE to 4 per cent for the 2024 year against its previous estimate of 3.5 per cent in April.

With regard to Saudi Arabia, IMF expects it to grow by 1.5 per cent this year in an improvement compared to its growth last year which was minus 0.2 per cent. For next year, it will grow by 4.6 per cent.

IMF’s regional chief attributed this growth to the economic development, non-oil economy in the Kingdom, improving oil production and also the unwinding of the Opec agreement.

IMF said that Middle East and North Africa (Mena) oil exporters are expected to see growth rise from 2.3 per cent this year to four per cent in 2025, contingent on the expiration of the voluntary oil production cuts.

Growth in oil importing countries, according to IMF, is projected to recover from 1.5 per cent in 2024 to 3.9 per cent in 2025, assuming conflicts ease.