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Muscat Daily
3 days ago
- Business
- Muscat Daily
GCC economic growth projected at 4.4% despite trade tensions
Muscat – GCC economies are set for stronger-than-expected growth this year, despite rising global trade tensions and subdued oil prices, according to the latest ICAEW Economic Insight report for the second quarter, prepared by Oxford Economics. The report highlights upgraded regional forecasts, with the GCC region's GDP now expected to expand by 4.4% in 2025, up from a previous estimate of 4.0%. While global GDP growth has been downgraded to 2.4% – the slowest pace since 2020 – the GCC is bucking the trend. This resilience is being driven by a quicker rollback of OPEC+ production cuts, which has lifted oil sector growth forecasts from 3.2% in March to 4.5%. However, the ICAEW report noted that with Brent crude expected to average $67.30 per barrel in 2025, the GCC faces increasing fiscal pressures. Only Qatar and the UAE are projected to maintain fiscal surpluses in 2025, underscoring the challenge of balancing growth ambitions with budget constraints. The report also stated that the impact of the 10% US tariff on imports from GCC countries is expected to be limited, given the region's relatively low export exposure to the US and the exemption of energy products. 'Non-oil sectors in the GCC are forecast to grow 4.1% this year, supported by strong domestic demand, investment momentum, and diversification initiatives. The region is also well positioned to absorb any trade rebalancing resulting from tariff pressures and geopolitical tensions,' the report said. In a press statement, Hanadi Khalife, Head of Middle East at ICAEW, said, 'The GCC economies are showing remarkable adaptability amid shifting global trade dynamics. Investments in tourism, technology, and infrastructure continue to pay dividends, strengthening resilience and laying the groundwork for long-term growth.' Scott Livermore, ICAEW Economic Adviser and Chief Economist and Managing Director at Oxford Economics Middle East, added, 'We have upgraded our GCC forecast due to faster OPEC+ output increases and sustained non-oil momentum in key economies like Saudi Arabia and the UAE. While uncertainty and trade shifts may place pressure on fiscal policy, the region's two leading economies are expected to continue progressing towards economic diversification and attracting global capital at an accelerated pace.' Saudi Arabia's oil economy is now forecast to grow by 5.2% in 2025, up sharply from 1.9% projected in March, reflecting increased oil output and economic momentum. Production is averaging 9.7mn barrels per day, while non-oil sectors – led by construction and trade -continue to expand. The UAE economy is projected to grow by 5.1% in 2025, driven by a recovery in oil output, a 4.7% rise in non-oil GDP, deepening trade ties, and improved market access. Tourism remains a key driver, with international visitor spending expected to contribute nearly 13% of GDP in 2025.
Daily Tribune
3 days ago
- Business
- Daily Tribune
GCC Surges Ahead Despite Global Slump
The Gulf economies are expected to grow faster than earlier projected, defying a broader global downturn and weak oil prices, according to the latest ICAEW Economic Insight report released on Monday. The Q2 update revises the GCC's 2025 GDP forecast upward to 4.4% from 4.0%, underscoring the region's resilience amid rising trade barriers and fiscal pressures. Prepared by Oxford Economics for ICAEW, the report contrasts the GCC's improved outlook with the downgrade in global GDP growth to 2.4%, the slowest pace since the 2020 pandemic shock. Oil and beyond A key driver behind the upgraded outlook is a faster-than-expected reversal of OPEC+ production cuts, which has lifted oil sector growth projections from 3.2% to 4.5%. However, the Brent crude average for 2025 is still forecast at a modest $67.3 per barrel, limiting fiscal space for several states. Only the UAE and Qatar are projected to maintain surpluses in 2025. Most other member states are likely to face tightening budgets, with Saudi Arabia forecast to run a deficit of 3.4% of GDP as spending outpaces oil revenues. Still, non-oil sectors are holding up strongly across the region, with forecast growth of 4.1% in 2025 driven by domestic demand, investment momentum, and diversification initiatives. The report highlights that the region remains well-positioned to absorb trade rebalances resulting from the 10% US tariff on GCC imports, which excludes energy products and has limited impact due to low US export exposure. Leaders of the pack Saudi Arabia's GDP forecast has been revised up to 5.2% for 2025, driven by strong oil output and a 5.3% projected rise in non-oil activities. Despite an 18% year-on-year drop in oil revenues during Q1 and growing fiscal deficits, investor confidence remains firm, with S&P upgrading the Kingdom's credit rating to A+. The UAE is expected to post 5.1% growth in 2025, supported by a 4.7% rise in non-oil GDP, increased oil output, and continued strength in tourism and investment. The D33 agenda and AI-focused collaborations are seen as key contributors to its expanding economic base. Dubai's 5.3 million international visitors in Q1 highlight the momentum in the tourism sector, projected to contribute nearly 13% of the UAE's GDP this year. Future outlook While the global economy struggles under trade tensions and slowdowns, the Gulf appears to be charting its own course, powered by diversification, infrastructure spending, and a strategic recalibration of oil production.
Zawya
06-05-2025
- Business
- Zawya
Qatar's economic growth expected to 'broadly steady' this year; sharp pickup seen in 2026: NBK
Qatar's economic growth is expected to broadly steady this year before accelerating sharply in 2026, according to National Bank of its latest 'Economic Insight', NBK said Qatar's fiscal accounts are expected to show surplus and public debt to fall in 2026. Qatar's economic growth is expected to broadly steady this year before accelerating sharply in 2026, according to National Bank of Kuwait (NBK). In its latest 'Economic Insight', NBK said Qatar's fiscal accounts are expected to show surplus and public debt to fall in 2026. 'Economic growth in Qatar is expected broadly steady in 2025 at 2.4% before accelerating sharply to 5.5% in 2026,' NBK noted. In Qatar, the cyclical downturn following the 2022 World Cup boom has faded and growth is seen accelerating again on stronger tourism activity, new government initiatives, and increased LNG production, National Bank of Kuwait said in its 'Economic Insight'. Hydrocarbon GDP will play an increasingly vital role in shaping Qatar's medium-term growth outlook (+9.8% in 2026), with the giant offshore North Field gas expansion project nearing completion, the report said. LNG output expansion is set to generate a 63% jump in already massive capacity by 2027-2028 (to 127mn tonnes per year - mtpy) and will eventually have positive knock-on effects on non-hydrocarbon GDP, as higher resulting revenues are channelled back into the economy to meet the next wave of development goals. Qatar's Third National Development Strategy targets an annual average growth of 4% in 2024-2030, also helped by business efficiency, FDI-promoting and innovation-enhancing reforms. Goals include growing labour productivity by 2% per year, attracting $100bn in cumulative FDI and developing specialised economic 'growth' clusters in manufacturing, logistics and tourism. The fiscal accounts should continue to show a surplus over the forecast horizon, from 2.3% of GDP in 2025 to a wider 4.5% of GDP next year as the first LNG trains from the gas expansion project come online. In recent years, Qatar's budget surpluses were deployed to lower outstanding public debt, a trend that will likely continue in the medium term; public debt could fall to 34% of GDP by 2026. According to NBK, downside risks to the outlook include a more severe than expected global economic downturn that weakens energy prices, and potentially lower prices for LNG in the event of global market excess supply. 'That said, the scale of Qatar's imminent energy output expansion and domestic investment targets should provide some degree of resilience against international headwinds,' the bank noted. The report also covered Oman and Bahrain and according to NBK, Bahrain's fiscal deficits are seen widening amid lower oil prices and still-elevated interest rates, despite repeated consolidation efforts. Following sustained reform implementation, Oman's positive economic performance is seen continuing with non-oil expansion, fiscal surpluses and a declining debt-to-GDP ratio, it said. © Gulf Times Newspaper 2022 Provided by SyndiGate Media Inc. ( Pratap John
Zawya
19-03-2025
- Business
- Zawya
GCC economy seen growing by 4% in 2025 despite global trade uncertainty
Muscat: The GCC economy is expected to show resilience in the face of rising global protectionism and geopolitical tensions, according to the latest ICAEW Economic Insight report, prepared by Oxford Economics. Despite the uncertain global trade and economic outlook, the report forecasts that GCC economies will grow by 4% in 2025, up from an estimated 1.8% in 2024. While US President Donald Trump's tariff policies have created uncertainty over external demand, the GCC remains largely insulated from direct tariff impacts. The region's non-energy sectors are projected to grow by 4.4% this year, up from an estimated 3.9% in 2024, with regional PMI data firmly in expansionary territory, according to the ICAEW report. GCC growth to withstand tariff headwinds Following recent OPEC+ policy shifts, oil production will gradually increase from April, boosting oil-sector growth to 3.2% after two years of contraction. Saudi Arabia's oil output is expected to reach 9.3mn barrels per day, driving oil sector growth of 1.9%, while the UAE's higher quota of 3.5mn barrels per day will support 4.8% growth. Oil prices have fallen sharply in recent weeks due to tariff threats and increased OPEC+ supply, with prices forecast to average $70.5 per barrel this year, down from $80.5 in 2024. Saudi Arabia and the UAE are expected to lead non-oil sector growth with 5.8% and 4.8%, respectively. Tourism – the fastest-growing sector across the region in 2024 – will remain a key driver of growth, with Saudi Arabia expecting continued expansion, supported by the GCC-wide visa initiative. Qatar's GDP is forecast to expand by 2.1% this year, with growth expected to more than double in 2026 as additional LNG capacity comes online. The non-energy economy is projected to grow by 2.9% this year, remaining the primary growth driver. Bahrain's economy is set to double its growth rate to 2.8% this year, with the non-oil economy expanding by 3.1%. The oil sector, after contracting by an estimated 2.4% in 2024, is expected to see a modest recovery of 0.9%. Hanadi Khalife, Head of Middle East at ICAEW, said, 'The business landscape across the GCC continues to demonstrate resilience and adaptability in the face of global economic uncertainty. We are seeing strong investment in key sectors like tourism and infrastructure, which are creating new opportunities for growth.' Scott Livermore, ICAEW Economic Advisor and Chief Economist and Managing Director at Oxford Economics Middle East, said, 'The GCC's projected 4% growth in 2025 highlights the region's ability to withstand external pressures while advancing its diversification efforts. Despite softer oil prices, the gradual easing of OPEC+ production cuts will support energy sector growth after two years of contraction.' According to the ICAEW report, the aggregate GCC inflation projection for 2025 remains at 2.3%, with inflation expected to stabilise around 2% in the medium term. Recent readings show inflation is below 1% in Bahrain, Oman, and Qatar, while in Saudi Arabia – the region's largest economy – inflation averaged 1.7% in 2024, driven almost exclusively by rising housing rents. Regional budgets this year continue to balance fiscal discipline with sustainable economic growth, with a strong focus on social development, including education and healthcare. 'Given our oil price and production forecasts, and expectations of a modest rise in government spending, we anticipate the aggregate GCC budget position will be broadly balanced, thanks to surpluses in Qatar and the UAE,' ICAEW said. Meanwhile, the report expects Saudi Arabia to run a budget deficit of 3% of GDP as the government pursues strategic investments. © Apex Press and Publishing Provided by SyndiGate Media Inc. (
Zawya
19-03-2025
- Business
- Zawya
Bahrain economy projected to hit 2.8% GDP growth in 2025
Bahrain's economy is projected to gather pace, reaching 2.8 per cent GDP growth in 2025, even with global economic headwinds, according to the latest Institute of Chartered Accountants in England and Wales (ICAEW) Economic Insight report, prepared by Oxford Economics. This positive outlook aligns with the broader GCC resilience, which is forecast to experience 4pc growth, up from an estimated 1.8pc in 2024. According to ICAEW economic adviser and Oxford Economics Middle East chief economist and managing director Scott Livermore, the GCC's projected 4pc growth in 2025 highlights the region's ability to withstand external pressures while advancing its diversification efforts. On Bahrain, the report highlights the kingdom's successful diversification efforts, with the non-oil sector contributing 86pc to overall GDP in 2024, demonstrating the country's progress in moving away from oil dependency. Notably, non-oil GDP growth is anticipated to reach 3.1pc in 2025, driven by strong performances in sectors like accommodation and food services, financial activities, and insurance. The island nation's strategic initiatives, such as the Gateway Gulf event, which secured $12 billion in deals across key sectors, underscore its commitment to diversification. Ongoing projects, including a $427 million waterfront development and the $221m Exhibition World Bahrain convention centre, operating since November 2022, are set to bolster tourism, a vital growth engine. To attract foreign direct investment (FDI), Bahrain is establishing new industrial free zones in Muharraq, near Bahrain International Airport, targeting the foodstuffs, pharmaceuticals, and garments industries. Initiatives like the Golden Licence, introduced in 2023, have already proven effective in attracting FDI into financial services, manufacturing, and technology. While oil GDP contracted by 2.4pc in 2024, the report forecasts a 0.9pc growth in 2025, driven by the $6 billion Bapco Modernisation Programme, which aims to increase refining capacity to 400,000 barrels per day by end-2025. Bapco Energies' successful $500m funding for the Bahrain Field Expansion and Development Programme further reinforces this positive outlook. However, the report also notes that lower oil prices, forecasted to average $70.5 per barrel in 2025, may constrain the sector's fiscal impact, given the kingdom's higher breakeven price. The GCC region's non-energy sectors are projected to grow by 4.4pc this year, up from an estimated 3.9pc in 2024, with regional PMI data firmly in expansionary territory. Following recent Opec+ policy shifts, oil production will gradually increase from April, boosting oil-sector growth to 3.2pc. 'Despite softer oil prices, the gradual easing of Opec+ production cuts will support energy sector growth after two years of contraction,' explained Mr Livermore. Inflation in Bahrain is projected to rise to 2.8pc in 2025, potentially impacting consumer spending. The fiscal balance is expected to remain in deficit, with debt levels exceeding 100pc of GDP. However, initiatives like the 15pc domestic top-up tax for multinational enterprises and a multi-year fiscal consolidation plan aim to enhance economic sustainability. The report also acknowledges the potential impact of US trade policies, particularly under President Trump. While the US-Bahrain Free Trade Agreement could strengthen economic ties, potential tariff shifts could introduce uncertainties, even as the GCC remains largely sheltered from direct tariff impacts. The kingdom's workforce is set to expand, driven by rising migration trends and updated UN population projections. This growth will be crucial for enhancing productivity and furthering diversification efforts across core sectors. Commenting on the regional outlook, ICAEW head of Middle East Hanadi Khalife said: 'The business landscape across the GCC continues to demonstrate resilience and adaptability in the face of global economic uncertainty. We're seeing strong investment in key sectors like tourism and infrastructure, which are creating new opportunities for growth.' avinash@
