Gulf growth forecast bright but Israel-Iran war threatens to derail outlook
The World Bank had predicted economic growth among Gulf Cooperation Council states to increase in 2025 and 2026, but experts are skeptical due to the regional conflict.
The World Bank released its latest outlook for Gulf economies, painting a rosy picture for the medium term, but experts warn that the Israel-Iran war could throw a wrench in the bank's predictions as the conflict threatens to upend the region.
Economic growth across Gulf Cooperation Council (GCC) states is expected to increase by 3.2% in 2025 and 4.5% in 2026, the World Bank said in the latest edition of its Gulf Economic Update, released Thursday. Its research put regional growth at 1.7% in 2024, compared to 1.4% in 2023. Most of the economic growth is expected to be driven by the GCC's non-oil sector, which is projected to expand by 3.7% this year, the report said.
The GCC's two largest economies, Saudi Arabia and the United Arab Emirates, are forecast to grow by 2.8% and 4.6%, respectively, in 2025, driven by expansion in non-oil sectors.
Qatar’s economy is projected to grow by 2.4% in 2025, with average growth rising to 6.5% in 2026 and 2027, driven by an expansion of its liquefied natural gas (LNG) production.
