GCC financial markets hit nearly $4.2 trillion in capitalization in 2024, marking 0.7 percent growth

Economy ME

2 days ago

The overall composite index of financial markets in the Gulf Cooperation Council (GCC) countries experienced a modest growth of 0.7 percent in 2024. This index serves as a reflection of the performance of GCC financial markets as a cohesive entity, the Emirates News Agency (WAM) reported.
By the conclusion of 2024, the total market capitalization of GCC financial markets reached approximately $4.2 trillion, as per the latest statistics released by the GCC Statistical Centre (GCC-Stat). However, this total market capitalization faced a decline of 4.4 percent compared to the close of 2023. In 2024, the market capitalization of GCC financial markets represented roughly 3.5 percent of the total global market capitalization.
In May 2025, the Consumer Price data published by the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (
GCC-Stat
) revealed that the general inflation rate in the GCC countries rose by 1.7 percent at the end of December 2024, compared to the figures recorded in the same month of the previous year.
The increase in the annual general inflation rate in the Gulf is largely attributed to a 5.9 percent rise in housing prices and a 2.8 percent increase in the prices of goods and services. The culture and entertainment sector experienced a 1.8 percent rise, while both the food and beverages sector and the education sector increased by 1.2 percent each. The restaurants and hotels sector saw a 1.1 percent increase, and the health sector edged up by 0.1 percent.
Read more: GCC countries contribute over 35 percent of all emerging-market U.S. dollar debt in Q1 2025, Fitch reports
GCC inflation dynamics
This inflation was counterbalanced by a 2.7 percent decline in prices within the transportation sector, 1.7 percent in furniture and household equipment, 1.1 percent in tobacco, 0.9 percent in communications, and 0.2 percent in clothing and footwear.
The overall inflation rate in the Gulf was also lower than the inflation rate in the European Union, which stood at 2.7 percent, and was beneath that of many of the GCC's major trading partners in total merchandise imports. Brazil recorded the highest inflation rate in December 2024 compared to the figures from the same month in the previous year, at 4.8 percent. Following Brazil was Japan at 3.6 percent, then the Republic of India and the United Kingdom at 3.5 percent each, the United States at 2.9 percent, Germany at 2.6 percent, South Korea at 1.9 percent, and both France and Italy at 1.3 percent each, with China at 0.1 percent.
The GCC banking sector posted a net profit of $15.6 billion during the first quarter of 2025, up 7.1 percent quarterly and 8.6 percent annually. This growth marked a new record high for the sector, despite a decline in net interest income during the quarter.
However, growth was mainly driven by higher non-interest income, lower operating expenses as well as a sharp seasonal decline in impairments during the quarter.
GCC banking sector profits hit record $15.6 billion in Q1 2025
The GCC banking sector reported a net profit of $15.6 billion in the first quarter of 2025, reflecting a quarterly increase of 7.1 percent and an annual rise of 8.6 percent. This growth set a new record high for the sector, even in the face of declining net interest income during the quarter.
The increase was primarily fueled by higher non-interest income, reduced operating expenses, and a significant seasonal drop in impairments during the period.
According to the latest report from
Kamco Invest
, the decrease in net interest income was influenced by rate cuts implemented in the second half of 2024. The aggregate yield on credit for the GCC banking sector fell by 5 basis points to 4.16 percent in Q1 2025, down from 4.21 percent in Q4 2024.