Middle East Economy Watch - May 2025*
President Trump’s trade and economic policies are creating opportunities and risks for the GCC. While global tariffs, weaker oil prices and higher borrowing costs are adding fiscal pressure, the region is actively responding with key investments, trade diversification, AI and data centre infrastructure and deeper US-GCC collaboration. The GCC’s combination of capital, energy and diplomacy make it well placed to navigate a more polarised economic environment.
In this edition of Middle East Economy Watch, we explore crucial shifts in energy policy, assess the regional impact of President Trump’s trade agenda and discuss updated economic and fiscal forecasts. As OPEC+ adjusts its production strategy, we examine how these changes - alongside global economic headwinds - are shaping GDP growth and adding to budgetary pressures across the GCC.
This edition also analyses the impact of global tariffs on regional trade and outlines the commercial agreements signed during President Trump’s landmark May visit to Saudi Arabia, Qatar and the United Arab Emirates (UAE). The visit underscored the US administration’s focus on deepening economic and technological ties with the GCC, recognising the region’s growing influence on the global stage.
Artificial intelligence emerged as a central pillar of President Trump’s visit, reflecting its increasing strategic importance in US-GCC relations. It signalled a clear intent to advancing collaboration on frontier technologies, aligning with the region’s ambitions to become a global hub for AI innovation. This comes amid a rapid expansion of data centre infrastructure in the GCC – a trend we explore in more detail here.
* This analysis reflects the tariff landscape at the time of publication. Given the fluid and evolving nature of global trade policies, particularly around tariffs, the situation is subject to change and should be monitored regularly for updates.
Richard Boxshall
Global Economics Leader and Middle East Chief Economist, PwC Middle East
Tel: +971 (0)4 304 3100
Carlos Garcia
Partner, Middle East Customs & International Trade, PwC Middle East
Tel: +971 56 682 0642
