Gulf economies achieve 1.9% growth in 2024, supported by economic diversification

Sayed Hussein Al-Qassab

In light of global economic challenges and fluctuations in energy markets, the economy of the Gulf Cooperation Council countries has shown a remarkable ability to adapt and grow, driven by economic diversification efforts and the expansion of investments in non-oil sectors. The indicators issued by the Gulf Statistical Center for the year 2024 reflected the strength of the economies of the GCC countries, and their continued momentum in the face of the slowdown in the oil sector, in addition to the stability of inflation rates and the improvement of public revenues. This report reviews the most prominent economic indicators for the Gulf Cooperation Council countries during the year 2024, based on data from the Gulf Statistical Center, covering general economic performance, developments in non-oil sectors, inflation rates, public revenues, and the movement of financial markets, to provide a comprehensive picture of the Gulf economic path and the ongoing diversification efforts towards a more sustainable and balanced economy.

The real GDP of the Gulf Cooperation Council countries during the year 2024, according to preliminary data issued by the Gulf Statistical Center, witnessed a growth of 1.9% compared to the year 2023, rising from approximately $1,791.0 billion to $1,825.1 billion. This moderate growth comes in light of the varying performance of the main economic sectors, as the non-oil sector played a pivotal role in supporting economic activity, while the oil sector, which includes oil and gas extraction activities and related services, recorded a noticeable contraction during the same period.

The average forecast issued by the Gulf Statistical Center indicates that the economy of the Gulf Cooperation Council countries will achieve a growth rate of 2.8% during the year 2025, with the pace of growth accelerating to reach 3.7% in 2026, and 4.3% in 2027, supported by increased investments in non-oil sectors and the expansion of regional economic activity.

Several sectors contributed to supporting the growth of real domestic product during the year 2024, as transportation and storage activities achieved a growth rate of 6.5%, followed by agriculture and fishing activities at a rate of 6.4%, in a clear reflection of the growing investments in the fields of infrastructure, transportation, and food, especially within food security projects and supply chains. Accommodation services also achieved a growth of 6.3%, which reflects the prosperity of the tourism sector in the GCC countries.

The construction, trade and financial activities sectors witnessed growth rates ranging between 5.0% and 5.5%, driven by major urban projects, increased domestic consumption, and banking activity. In contrast, the contribution of the extractive industry sector, which includes oil and gas extraction activities and related services, declined by 3.7%, as a result of the decline in oil prices and production. As for the social sectors, such as education and health, they maintained stable growth, as the education sector recorded a growth of 2.5%, and the health and social work sector by 2.9%, which reflects the continued government investment in human capital and enhancing the quality of public services.

The Gulf Statistical Center’s expectations indicate a slowdown in the growth of the non-oil sector during the year 2025 compared to 2024, with an expected growth rate of 3.5%. However, the Gulf Statistical Center explained that performance is likely to improve during the years 2026 and 2027, driven by the expansion of non-oil economic activities, especially in the sectors of tourism, transportation, storage, and retail trade, supported by Infrastructure projects that contribute to creating an attractive environment for investment.

As part of the Gulf Cooperation Council countries’ continued implementation of economic diversification strategies, the period from 2025 to 2027 is expected to witness growth in multiple strategic sectors, most notably renewable energy, as the Gulf countries continue to pump investments into solar energy, green hydrogen, and wind energy projects, in a way that enhances environmental sustainability and reduces dependence on traditional energy sources.

The technology and innovation sector is also expected to witness qualitative leaps thanks to digital transformation programs and increased adoption of emerging technologies such as artificial intelligence, block chain, and the Internet of Things, while the manufacturing sector is expected to achieve increasing growth driven by government and private investments, especially in the fields of petrochemicals, the automobile industry, and food. According to preliminary data from the Gulf Statistical Center, the gross domestic product of the Gulf Cooperation Council countries at current prices recorded moderate growth in 2024, rising from about $2,276.0 billion in 2023 to $2,325.6 billion in 2024, an increase of $49.6 billion, or a growth rate of 2.2%. The oil sector’s contribution to the GDP at current prices reached 24.0% in 2024, with a value of $559.1 billion, compared to the non-oil sector’s contribution of 76.0%, with a value of $1,766.4 billion.

Extractive industry activities, which include oil and gas extraction and related services, continued to top the list of economic activities, reaching a value of $564.9 billion, representing 24.3% of the GDP at current prices for the GCC countries, despite their decline from their levels in 2023, followed by the manufacturing sector with a value of $295.1 billion, or 12.7% of the GDP. Domestic, then the wholesale and retail trade and vehicle repair sector by 9.4%.