The Gulf Cooperation Council (GCC) is entering a new phase of outward-looking growth powered by diversification, trade openness and investment-led expansion, according to PwC Middle East’s latest Middle East Economy Watch – November 2025.
The report finds that despite lower oil prices and fiscal pressures, the region’s economies are responding with agility, doubling down on diversification, trade openness and investment-led growth.
PwC projects GCC real GDP growth at 3.9 per cent in 2025 and 4.4 per cent in 2026. Non-oil sectors continue to anchor momentum, with Abu Dhabi’s economy expanding 6.4 per cent in the first half of 2025, Qatar growing 5.3 per cent and Saudi Arabia 4.2 per cent. Low inflation, averaging around 1.5 per cent, and strong domestic demand are supporting continued expansion.
OPEC+ members have restored 2.2 million barrels per day of earlier voluntary cuts and are gradually unwinding an additional 1.6 million barrels per day. The UAE’s output in the first nine months of 2025 rose by 4.2 per cent year on year, while Saudi Arabia’s increased by 3.3 per cent. However, this coincided with Brent crude prices falling to US$60 per barrel, the lowest since 2020.
According to Middle East Economy Watch, lower prices are testing the limits of fiscal resilience. The IMF projects 2026 fiscal deficits of –3.7 per cent of GDP for Saudi Arabia and –9.9 per cent for Bahrain, while the UAE is expected to maintain a surplus. Governments are tightening short-term spending yet sustaining long-term investments, signalling greater fiscal discipline and maturity.
“Fiscal resilience today means adaptability. Lower oil prices are testing buffers and reinforcing the region’s commitment to reform. The imperative remains clear: governments in the region must channel investment into non-oil sectors, private enterprise, and trade partnerships, to sustain the transition to a balanced growth model,” said Richard Boxshall, Partner and Chief Economist, PwC Middle East.
The report highlights that trade expansion beyond oil is becoming a defining feature of the GCC’s next growth phase. Recent milestones include new Comprehensive Economic Partnership Agreements (CEPAs) with Australia and Malaysia, and ongoing talks with the UK, Pakistan, Indonesia, and Japan. Asia and Africa now anchor the GCC’s trade agenda, with investment in Africa exceeding US$53 billion in 2023.
Stephen Anderson, Chief Strategy and Technology Officer at PwC Middle East, said: “The GCC’s trade strategy reflects a region taking control of its economic future. By forging new trade partnerships and opening new markets across Asia and Africa, the GCC is redefining its role from a traditional energy supplier to a key player shaping the next phase of global trade and investment.”
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