- Growth momentum and diversification: Low inflation and strong domestic demand are supporting continued economic expansion. Despite lower oil prices, the GCC is forecasted to grow at 3.9% in 2025 and 4.4% in 2026.
- Fiscal resilience under pressure: OPEC+ output is rising, but lower oil prices are testing regional budgets, with forecasters projecting 2026 fiscal deficits of –3.7% of GDP for Saudi Arabia and –9.9% for Bahrain.
- Non-oil growth drives expansion: Continued growth in United Arab Emirates, Qatar and Saudi Arabia confirms that diversification strategies are anchoring long-term stability.
- Expanding global trade: The GCC is broadening its network of trade agreements with major partners across Asia, Africa and Europe, strengthening its position as a key hub in global commerce.
13 November 2025; Riyadh, Kingdom of Saudi Arabia – PwC Middle East’s latest Middle East Economy Watch: Beyond oil, GCC’s expanding trade agenda gains momentum, finds that the Gulf Cooperation Council (GCC) is entering a new phase of outward-looking growth, underpinned by an expanding trade agenda and deeper global integration. Despite headwinds from lower oil prices and fiscal pressures, the region’s economies are responding with agility, doubling down on diversification, trade openness, and investment-led growth.
OPEC+ output rises, but fiscal headwinds grow
OPEC+ production has increased faster than anticipated, restoring 2.2 million barrels per day of earlier voluntary cuts and gradually unwinding a further 1.6 million barrels per day of reductions. The UAE’s output in the first nine months of 2025 rose by 4.2% year on year, while Saudi Arabia’s increased by 3.3%, lifting growth prospects. However, this coincided with Brent crude prices falling to US$60 per barrel, the lowest since 2020.
Lower prices are testing the limits of fiscal resilience, proving that volume alone is insufficient to balance budgets. The IMF projects 2026 fiscal deficits of –3.7% of GDP for Saudi Arabia and –9.9% for Bahrain, while the UAE is expected to maintain a surplus. Governments are tightening short-term spending yet sustaining long-term investments, signalling greater fiscal discipline and maturity.
Richard Boxshall, Partner and Chief Economist, PwC Middle East, said: “Fiscal resilience today means adaptability. Lower oil prices are testing buffers and reinforcing the region’s commitment to reform. The imperative remains clear: governments in the region must channel investment into non-oil sectors, private enterprise, and trade partnerships, to sustain the transition to a balanced growth model.”
Non-oil activity anchors regional momentum
Across the GCC, non-oil sectors continue to perform strongly. Abu Dhabi expanded 6.4% in the first half of 2025, followed by Qatar at 5.3% and Saudi Arabia at 4.2%. Low inflation (averaging 1.5%) and strong domestic demand are supporting continued expansion. The IMF now forecasts GCC real GDP growth at 3.9% in 2025 and 4.4% in 2026 demonstrating that diversification is now driving momentum and strengthening the GCC’s growth model.
Non-oil activity has become the engine of regional momentum, fuelled by growth in tourism, logistics, manufacturing and digital infrastructure - including AI and data centres - alongside expanding financial and professional services that are strengthening the GCC’s economic base.
The GCC’s expanding trade agenda beyond oil
The Gulf Cooperation Council (GCC) is accelerating efforts to diversify its economies and expand global partnerships through a growing network of Comprehensive Economic Partnership Agreements (CEPAs) and Free Trade Agreements (FTAs).
Recent milestones include new CEPAs with Australia and Malaysia, and ongoing talks with the UK, Pakistan, Indonesia and Japan. Asia and Africa now anchor the GCC’s trade agenda, with investment in Africa exceeding US$53 billion in 2023.
This shift from signing deals to capturing value will define the GCC’s next phase of trade leadership, positioning the region as a unified, reliable, and competitive hub for international commerce and investment.
Stephen Anderson, Chief Strategy & Technology Officer at PwC Middle East, said: “The GCC’s trade strategy reflects a region taking control of its economic future. By forging new trade partnerships and opening new markets across Asia and Africa, the GCC is redefining its role from a traditional energy supplier to a key player shaping the next phase of global trade and investment.”
He added: “The real opportunity now lies in turning ambition into impact. That means moving beyond signing deals to delivery, by accelerating implementation, completing the customs union, and ensuring businesses can fully leverage the access and advantages these agreements create.”
For further insights, download the full Middle East Economy Watch – Nov 2025 report on our website.
About PwC
At PwC, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We’re a tech-forward, people-empowered network with more than 364,000 people in 136 countries and 137 territories. Across audit and assurance, tax and legal, deals and consulting, we help clients build, accelerate, and sustain momentum. Find out more at www.pwc.com.
With over 12,000 people across 12 countries in 30 offices, PwC Middle East combines deep regional insight with global expertise to help clients solve complex problems, drive transformation, and achieve sustained outcomes. Learn more at www.pwc.com/me.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
© 2025 PwC. All rights reserved
