Anticipated Expenditure of $542.1 Billion by GCC in 2025, Predicting a $54.3 Billion Budget Shortfall
Gulf Economies Forecast and Diversification Efforts
Hey there! Let's dive into the latest economic forecasts for the Gulf Cooperation Council (GCC) countries. Buckle up, it's an exciting ride!
In a recent announcement, the Gulf Statistical Center revealed that the GCC's estimated budget expenditure for 2025 stands at a whopping $542.1 billion, with anticipated government revenues of $487.8 billion. This means a projected budget deficit of $54.3 billion for the year. The center attributed oil revenues as the main income source for GCC nations, while member states maintain a cautious approach when estimating the break-even oil price in their national budgets to shield their economies from oil market fluctuations.
Despite the challenges, the region's government revenues are expected to remain relatively stable, fueled by moderate to high oil prices. The report also spotlighted increased government spending plans in 2025 compared to 2024, aiming to drive economic growth across the region. To manage projected deficits, the countries intend to tap into financial reserves and borrow from both domestic and international sources.
Now, let's take a look at Kuwait's economic performance. During the fourth quarter of 2024, Kuwait recorded a GDP of $39.8 billion, ranking fourth among GCC countries. Oil-related activities made up 59.6% of Kuwait's GDP, with the non-oil sector contributing a significant 40.4%. Notably, the financial intermediation and real estate sectors contributed 17.8% to the GDP, followed by the education, health, social work, and other service-related sectors, contributing 12.6%. The manufacturing sector accounted for 8.3%, making up the rest of the economic activities.
The GCC countries collectively witnessed a record high quarterly GDP of $587.8 billion in the fourth quarter of 2024. The non-oil sectors drove 77.9% of this growth, with manufacturing industries, real estate activities, wholesale and retail trade, finance and insurance, construction, and public administration and defense contributing prominently.
Furthermore, the data indicates substantial progress in Gulf states' diversification efforts away from oil dependence. As we speak, non-oil sectors are making impressive contributions to GDP across the region. For instance, in the UAE, the non-oil sector contributed 76% to the country's GDP, with tourism poised to contribute nearly 13% of GDP in 2025. Saudi Arabia's non-oil sector contributed 82.5% to its GDP, with non-oil activities expected to grow by a robust 5.3% in 2025.
In summary, Gulf economies are on a path to growth, with governments actively working to stimulate key sectors, complete major infrastructure projects, and advance long-term strategic development goals. Keep an eye on these economies, as they continue to make strides toward a more diverse and stable economic future!
📌Fun Fact: The Gulf Statistical Center plans to eliminate paper-based reporting processes by 2026, aiming for a more eco-friendly, efficient, and standardized data system across the Gulf.
🌟Quick Tip: To stay updated on the latest news and insights from these dynamic Gulf economies, consider following reputable sources like the Gulf News, Gulf Business, and Forbes Arabia. Happy reading!
The financial sector in Gulf economies is projected to contribute significantly as governments borrow from both domestic and international sources to manage budget deficits, demonstrating the importance of finance in addressing economic challenges.
The non-oil sectors, which include finance and insurance, are making remarkable contributions to the Gulf Cooperation Council (GCC) countries' GDP, indicating the industry's crucial role in the region's diversification efforts and future economic stability.
