GCC Economy to Grow in 2025 Following OPEC+ Policy Shifts
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 US$70.5 per barrel this year, down from US$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.
25/03/2025
OPEC+ Issues New Plan for Oil Cuts to Compensate for Overproduction
OPEC+ has issued a new schedule for seven member nations to make further oil output cuts to compensate for pumping above agreed levels, which will more than overtake the monthly production hikes the group plans to introduce next month.
The plan will represent monthly cuts of between 189,000 barrels per day and 435,000 bpd, according to a table on OPEC's web site. The scheduled cuts last until June 2026.
OPEC+, which includes OPEC plus Russia and other allies, has been cutting output by 5.85 million bpd, equal to about 5.7% of global supply, agreed in a series of steps since 2022 to support the market.
On March 3, it confirmed that eight of its members including Russia, Saudi Arabia, UAE, Kuwait, Oman, Algeria, Kazakhstan and Iraq would proceed with a monthly increase of 138,000 bpd from April, citing healthier market fundamentals.
But sources told Reuters that recent, hefty overproduction from Kazakhstan angered other members and was one of the deciding factors that ultimately led the group to proceed with the hike.
Under the revised plan, Iraq will make the bulk of the contribution to the compensation cuts followed by Kazakhstan and Russia.
The plan also sees Saudi Arabia, one of the main stalwarts of adhering to the OPEC+ deal, making small compensation cuts of 6,000 to 15,000 bpd over a period of three months.
Kazakhstan has been producing at a record high as U.S. oil major Chevron expands output at the largest Kazakh oilfield, Tengiz.
Recent OPEC data showed that Kazakhstan produced 1.767 million bpd of crude in February, up from 1.570 million bpd in January, compared with an OPEC+ quota of 1.468 million bpd.
25/03/2025
Egypt’s Mrkoon Raises Bridge Funding from A Ventures
Egypt-based waste management platform Mrkoon has secured bridge funding from A Ventures, increasing the investment firm’s stake in the startup to 28 percent. The funding will support Mrkoon’s regional expansion, with plans to enter the GCC market.
Founded in 2022 by Mohamed Shalabi, Ahmed Mamdouh, and Ahmed Amir, Mrkoon operates a business-to-business platform that enables enterprises, particularly in the industrial and manufacturing sectors, to offload surplus materials and scrap. A Ventures, an Egypt-based investment and portfolio management firm, was established in 2024 by Sherif Ramadan and Ayman Abbas.
25/03/2025
Abu Dhabi Aiming to Become World’s 1st AI-Driven Govt.
Abu Dhabi has signed a multi-year deal with Microsoft and Core42 to build a sovereign cloud system, supporting its push to become the world’s first AI-powered government.
The deal — inked by the Department of Government Enablement, Microsoft, and Core42, a subsidiary of G42 — supports the emirate’s plan to automate 100 percent of government operations by 2027, backed by a 13 billion dirham (US$3.54 billion) investment in digital infrastructure, according to Emirates News Agency, also known as WAM.
This strategy includes over 200 AI-powered solutions aimed at enhancing government service delivery, boosting productivity and operational efficiency, and contributing to environmental sustainability.
The agreement was signed by Ahmed Tamim Al-Kuttab, chairman of the Department of Government Enablement; Satya Nadella, chairman and CEO of Microsoft; and Peng Xiao, CEO of G42 Group.
“By integrating Microsoft’s cloud technologies, G42’s AI expertise, and the government’s strategic vision, we are contributing to the development of a powerful platform that redefines government services,” Al-Kuttab said.
He added that technology has the potential to revolutionize how governments interact with people, making services more efficient, engaging, and impactful.
Nadella emphasized that AI is pushing the boundaries of what governments can achieve and how they serve their communities worldwide.
“Abu Dhabi is leading the way in this field, and through our partnership with the Government Empowerment Department and G42, we are setting new benchmarks for AI adoption in the public sector. We support Abu Dhabi’s vision to become the world’s first AI-powered government,” Nadella said, according to WAM.
The initiative aims to increase transparency and security for investors and businesses while fostering a more innovative, flexible, and creative work environment for government employees in Abu Dhabi.
This also includes the rollout of TAMM 3.0, a revamped government services platform that has cut customer visits by 90 percent and enabled 73 percent of transactions to be completed instantly.
Xiao emphasized that the agreement marks a significant step toward realizing Abu Dhabi’s ambition of becoming the world’s first fully AI-powered government.
“Our public sovereign cloud system, powered by Azure and enhanced with the sovereign control platform ‘Insight,’ enables government entities to maintain data sovereignty while benefiting from advanced innovation,” Xiao said.
He continued: “This partnership is more than just a technological advancement — it represents our commitment to building a strong, future-ready digital infrastructure that supports AI modernization across various government entities in Abu Dhabi and sets a new global standard for innovation.”
Sheikh Tahnoun bin Zayed Al-Nahyan, Abu Dhabi’s deputy ruler and chairman of the Artificial Intelligence and Advanced Technology Council, also attended the signing alongside Khaldoon Khalifa Al-Mubarak, chairman of the Executive Affairs Authority.
25/03/2025
NCSI Announces Oman’s Oil Exports in January
Oman exported approximately 25.82 million barrels of oil by the end of January 2025, with an average price of US$72.5 per barrel, according to data from the National Centre for Statistics and Information (NCSI). Oil exports accounted for 84.3% of total production, which stood at 30.61 million barrels for the month. However, exports declined by 1.5% compared to January 2024, when Oman shipped 26.2 million barrels.
This drop coincided with a 2% reduction in production, which had reached 31.23 million barrels in the same period last year. Crude oil output fell by 2.2% to 23.39 million barrels, while condensate production totalled 7.22 million barrels. The average daily oil production stood at 987,500 barrels in January 2025.
25/03/2025