GCC trade set to grow 5.5% annually, reaching $2.3 trillion by 2033: BCG report

Arab News

29-01-2025

RIYADH: The Gulf Cooperation Council's trade sector is set to grow at an annual rate of 5.5 percent, reaching $2.3 trillion by 2033, according to a new report by Boston Consulting Group.
The BCG analysis highlights a robust outlook for GCC trade, driven by significant expansion across multiple corridors.
The region's non-hydrocarbon trade is also set to expand by 3.5 percent annually, reinforcing the success of economic diversification efforts.
Global trade is expected to grow at an average rate of 2.9 percent annually through 2033, according to the report.
The expansion is driven by evolving partnerships and advancements in supply chain technology. As economies adapt to post-COVID-19 disruptions and regulatory changes, new trade corridors are emerging, particularly between the Global South and established markets. The shift creates significant opportunities for regions like the GCC to enhance their roles in global commerce.
Commenting on the developments, Rami Rafih, managing director and partner at BCG, said the reconfiguration of global trade flows presents a transformative opportunity for the GCC.
'As trade routes evolve, the region is not merely a geographic intermediary but a central orchestrator of emerging trade patterns,' he said, adding: 'The GCC's proactive investment in trade capabilities positions it to shape the future of global commerce.'
China is set to emerge as the largest growth market for GCC trade, with exchange volumes increasing by $88 billion at a compound annual growth rate of 5.7 percent.
Japan follows closely, with an expected increase of $46 billion, reflecting a 9.4 percent annual growth rate.
The report, titled 'Great Powers, Geopolitics, and the Future of Trade,' underscores the GCC's strategic positioning as a vital link between East and West, benefiting from shifting global patterns.
With China's trade with the Global South projected to increase by $1.25 trillion and transactions between developing nations expected to rise by $673 billion by 2033, the GCC is set to capture a substantial share of this evolving landscape.
Beyond its traditional reliance on hydrocarbon exports, the GCC's non-oil trade is gaining momentum, fueled by regulatory enhancements, expanding infrastructure, and strategic agreements.
The shift aligns with the region's broader economic diversification efforts under national transformation plans.
The report also highlights major global trade realignments that could benefit the GCC.
North America is solidifying its resilience, with US-Mexico business forecast to grow by $315 billion by 2033, while the Association of Southeast Asian Nations is set to achieve a 3.7 percent annual growth rate.
India is emerging as a critical player, with total trade expected to reach $1.8 trillion annually by 2033.
As the Global South gains economic influence, representing 18 percent of the international gross domestic product and 62 percent of the world's population, trade among developing nations is expected to expand significantly.
Annual exchange within these regions is set to rise by $673 billion over the next decade, while trade between the Global South and developed economies is projected to hit $1.67 trillion annually by 2033.
To capitalize on these shifting dynamics, the report outlines key strategies for business leaders in the GCC, emphasizing supply chain resilience and expansion into high-growth markets like India and China.
It also encourages investment in nearshoring strategies to leverage the region's strategic position.
'Success will depend on cultivating deep market intelligence, robust scenario planning, and strategic partnerships,' Cristian Rodriguez-Chiffelle, partner and director for trade and investment at BCG, said.
With global trade undergoing rapid transformation, the GCC's ability to position itself as a key player in emerging trade corridors will determine its long-term economic resilience and influence in the global marketplace.