GCC economic growth projected at 4.4% despite trade tensions
The report highlights upgraded regional forecasts, with the GCC region's GDP now expected to expand by 4.4% in 2025, up from a previous estimate of 4.0%.
While global GDP growth has been downgraded to 2.4% – the slowest pace since 2020 – the GCC is bucking the trend. This resilience is being driven by a quicker rollback of OPEC+ production cuts, which has lifted oil sector growth forecasts from 3.2% in March to 4.5%.
However, the ICAEW report noted that with Brent crude expected to average $67.30 per barrel in 2025, the GCC faces increasing fiscal pressures. Only Qatar and the UAE are projected to maintain fiscal surpluses in 2025, underscoring the challenge of balancing growth ambitions with budget constraints.
The report also stated that the impact of the 10% US tariff on imports from GCC countries is expected to be limited, given the region's relatively low export exposure to the US and the exemption of energy products.
'Non-oil sectors in the GCC are forecast to grow 4.1% this year, supported by strong domestic demand, investment momentum, and diversification initiatives. The region is also well positioned to absorb any trade rebalancing resulting from tariff pressures and geopolitical tensions,' the report said.
In a press statement, Hanadi Khalife, Head of Middle East at ICAEW, said, 'The GCC economies are showing remarkable adaptability amid shifting global trade dynamics. Investments in tourism, technology, and infrastructure continue to pay dividends, strengthening resilience and laying the groundwork for long-term growth.'
Scott Livermore, ICAEW Economic Adviser and Chief Economist and Managing Director at Oxford Economics Middle East, added, 'We have upgraded our GCC forecast due to faster OPEC+ output increases and sustained non-oil momentum in key economies like Saudi Arabia and the UAE. While uncertainty and trade shifts may place pressure on fiscal policy, the region's two leading economies are expected to continue progressing towards economic diversification and attracting global capital at an accelerated pace.'
Saudi Arabia's oil economy is now forecast to grow by 5.2% in 2025, up sharply from 1.9% projected in March, reflecting increased oil output and economic momentum. Production is averaging 9.7mn barrels per day, while non-oil sectors – led by construction and trade -continue to expand.
The UAE economy is projected to grow by 5.1% in 2025, driven by a recovery in oil output, a 4.7% rise in non-oil GDP, deepening trade ties, and improved market access. Tourism remains a key driver, with international visitor spending expected to contribute nearly 13% of GDP in 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
a day ago
- Observer
Oil price structure narrows, premiums fall as supplies rise
LONDON: Premiums for prompt benchmark oil prices globally are falling compared with those in future months on rising output from the Middle East, Latin America and Europe, just as peak summer demand ends, traders and analysts said on Thursday. Easing concerns that the US could impose more sanctions on Russia and further disrupt oil supplies are also weighing on oil prices, they said. The six-month time spreads for Brent futures, US West Texas Intermediate futures and Middle East marker Dubai have narrowed by more than $1 a barrel in backwardation since the start of the month. Backwardation refers to a market structure where prompt prices are higher than those in future months, indicating tight supply. A narrowing of the structure indicates a market view that supplies are expected to rise. "Brent and Dubai time spreads are softening mainly on expectations of incremental OPEC+ supply from September and easing fears of Russian disruption after recent steady flows via both Baltic and Black Sea," said Shohruh Zukhritdinov, a Dubai-based oil trader. "US crude supply remains stable, but refinery runs will gradually decline into the shoulder season, easing prompt tightness," he said. US President Donald Trump and Russian President Vladimir Putin will meet in Alaska on Friday to strike a ceasefire deal in Ukraine. Citi analysts said Brent could land in the low-$60s per barrel area, if there is progress towards a US-Russia deal. RISING SUPPLY, END OF SUMMER Traders are bracing for more supplies after the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed to increase September output, just as non-OPEC producers such as Guyana, Brazil and Norway launched new production. Peak oil demand during the Northern Hemisphere summer is also ending, cooling red-hot diesel margins in Europe and reducing the burning of crude for power in Saudi Arabia, the sources said. "We saw a lot of selling in the window, with expectation around crude demand revised down as refinery margins weaken as gasoil/diesel cracks unravel," said Harry Tchilinguirian, group head of research at Onyx Capital Group, referring to physical trade in the North Sea market. Danish wind farm developer Orsted said on Monday it plans a $9.4 billion rights issue citing adverse development in the US offshore wind market. "Now that seasonal demand is going to unwind, and we cannot be sure that China will keep up elevated imports (for stockpiling), so where does the extra Saudi barrels go?" Meanwhile, spot premiums for Middle East benchmarks Dubai and Oman hovered at their lowest in more than a month for October-loading supply. Still, Dubai is relatively stronger than Brent, keeping the price spread between the benchmarks - known as the Exchange of Futures for Swaps - narrow and allowing Atlantic Basin supply to head to Asia. Asian refiners have already snapped up millions of barrels of oil from the United States, Africa and Europe for delivery in September and October. Neil Crosby, analyst at Sparta Commodities, said there is still uncertainty over Russian supply with the world's third-largest oil importer India buying spot cargoes to replace Russian oil in recent weeks. "Some (Russian) Urals will go to China but the story is not over yet and there is still some tail risk over what happens to Russian (oil) that cannot clear which makes the EFS trade short term even trickier than normal," he said. — Reuters
Observer
2 days ago
- Observer
Oil market retreats as supply outlook pressures prices
Oil prices extended their recent declines, falling 1.2% on Monday before steadying on Tuesday, as traders await Friday's highly anticipated meeting between US and Russian leaders. The talks could lead to a partial easing of US sanctions on Russia, an OPEC+ member, potentially adding more supply to the market. According to Vijay Valecha, Chief Investment Officer at Century Financial, crude prices have been under pressure this year as the OPEC+ producer group accelerated output increases despite lingering risks of oversupply. The US Department of Energy on Tuesday raised its forecast for this year's global oil surplus to 1.7 million barrels per day, while OPEC maintained a more bullish view, predicting a tighter market ahead. The International Energy Agency's latest projections are due Wednesday. US industry data indicated a slight increase in nationwide stockpiles last week, with official figures expected later in the day. In Asian trading hours, Brent futures volumes remained subdued, and volatility in the benchmark hovered near a two-week low. Technically, Brent is trading at $65.7, with resistance at $67.3 (50 SMA) and support at $63.7. US benchmark WTI is holding below the 9 SMA, reflecting a bearish bias. Key support sits at $62.1, with a breakdown potentially opening the way to the $60–$59 range. Resistance is noted at $63.6, and a move above could see prices test $64.3 and $65.1. The combination of robust supply forecasts, geopolitical developments, and technical resistance levels is likely to keep crude oil trading under pressure in the short term.
Observer
4 days ago
- Observer
Oman oil price reaches RO 68.51 per barrel
MUSCAT: The official price of Oman oil for October delivery reached $67.98 on Monday. The price of Oman oil Monday decreased by 53 cents compared to last Friday's price of $68.51. The monthly average price of Omani crude oil for August delivery reached $69.37 per barrel, an increase of $5.75 compared to the price for July delivery. Meanwhile, international oil prices were steady on Monday, after falling more than 4% last week, as investors looked ahead to talks between the US and Russia later this week on the war in Ukraine. Brent crude futures were up 5 cents to $66.73 a barrel at 1003 GMT, while US West Texas Intermediate crude futures were down 1 cent to $63.99. — Agencies
