Latest news with #non-oilsectors
Khaleej Times
17-07-2025
- Business
- Khaleej Times
GCC's GDP growth to see a big jump in 2025, helped by oil output hike
The aggregated real GDP growth of the six GCC countries is expected to increase significantly from 2 per cent in 2024 to 3.6 per cent in 2025, due to an increase in oil production as well as the growth of non-oil sectors, according to the latest forecast by the Institute of International Finance (IIF). 'The direct impact of higher global tariffs on the GCC is limited as oil and gas exports are exempted, and non-hydrocarbon exports from the region are relatively small. Growth will also be supported by the ongoing investments in logistics, manufacturing, renewable energy, and tourism, while inflation remains low,' said Dr Garbis Iradian, chief economist for Mena at IIF. He said non-oil real GDP growth will remain strong at 3.9 per cent, supported by ongoing infrastructure projects and diversification efforts away from oil. Earlier, the Central Bank of the UAE projected 3.2 per cent and 4.3 per cent real GDP growth for 2025 and 2026, respectively. According to a Reuters survey, Opec oil output rose in June, led by Saudi Arabia after an Opec+ agreement to raise production. Opec pumped 27.02 million barrels per day in June, up 270,000 barrels from the previous month. Moreover, Iradian noted that macro-financial risks are low due to ample foreign exchange reserves, low debt and ongoing reforms. 'The banking systems remain sound, supported by strong asset quality, ample capital and liquidity ratios, and sustained profitability. However, lower oil prices will narrow the aggregated current account surplus from 5 per cent of GDP in 2024 to 2 per cent in 2025, and widen the fiscal deficits in Saudi Arabia, Bahrain, and Kuwait,' said Iradian. Capital inflows/outflows According to IIF's note 'GCC: Surge in Capital Flows', non-resident private capital inflows to the GCC economies are expected to reach $202 billion (Dh741.34 billion) in 2025 and $217 billion (Dh796.39 billion) in 2026. 'The upswing in private non-resident capital flows in 2024 was mainly driven by the continued surge in FDI in the UAE and portfolio debt flows in Saudi Arabia. In an era of geopolitical and macro uncertainties, the GCC region continues to benefit from a stable political environment, improvement in the business environment, and strong economic fundamentals,' said Dr Garbis Iradian. Meanwhile, capital outflows from the GCC will continue to exceed nonresident capital inflows. Due to the slowdown in the pace of resident capital outflows, IIF forecasted that the net capital outflows will decrease from a peak of $279 billion in 2022 to $12 billion in 2025, largely due to a smaller aggregated current account surplus. 'We expect FDI outflows from the GCC to increase from around $60 billion in 2024 to $110 billion by 2026, with most of the increase destined to the United States in the context of the recent mega deal signed with Saudi Arabia, the UAE and Qatar,' it said.
Zawya
24-06-2025
- Business
- Zawya
Annual Industrial Production Index drops 2.3% in 2024: Saudi GASTAT
RIYADH — Saudi Arabia's annual Industrial Production Index (IPI) recorded a year-over-year decrease of 2.3 percent during the year 2024. According to the statistical report released on Monday by the General Authority for Statistics (GASTAT), this decrease is primarily driven by a 5.2 percent drop in oil activity, while non-oil activities recorded a 5.3 percent increase, reflecting improved performance across all non-oil economic sectors compared to 2023. According to the statistics, the annual index for mining and quarrying activity fell by 6.8 percent compared to 2023, while the annual index for manufacturing activity rose by 4.7 percent. The annual index for the coke and refined petroleum products manufacturing activity rose by 2.8 percent, while the chemical and chemical products manufacturing activity and the food products manufacturing activity rose by 2.9 percent and 6.29 percent respectively. The annual index for electricity, gas, steam, and air conditioning supply activities recorded an increase of 3.5 percent, while the index for water supply, sewerage, waste management, and remediation activities rose by 1.6 percent compared to 2023. The IPI is an economic indicator that measures changes in the volume of industrial output based on data from the industrial production survey. © Copyright 2022 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (
Arab News
21-06-2025
- Business
- Arab News
Saudi Arabia's economic resilience shines in Q1 2025
According to estimates by the General Authority for Statistics, Saudi Arabia's real gross domestic product grew by 3.4 percent in the first quarter of 2025 compared to the same period in 2024. On a seasonally adjusted basis, real GDP rose by 1.1 percent compared to the fourth quarter of 2024. Non-oil activities grew by 4.9 percent year-on-year and 1 percent quarter-on-quarter. Government activities expanded by 3.2 percent year-on-year and 5.5 percent quarter-on-quarter. In contrast, oil activities declined by 0.5 percent year-on-year and 1.2 percent from the previous quarter. Despite the drop in oil activities, most economic sectors recorded annual growth. For example, wholesale and retail trade, along with restaurants and hotels, recorded the highest growth among non-oil sectors in Q1 2025, rising by 8.4 percent year-on-year and 7 percent quarter-on-quarter. This was followed by transport, storage, and communication activities, which expanded by 6 percent year-on-year and 1.8 percent quarter-on-quarter. Additionally, financial, insurance and business services grew by 5.5 percent compared to the same quarter last year, despite a slight quarter-on-quarter decline of 1 percent. The growth in non-oil activities aligns with Saudi Vision 2030, which aims to boost non-oil revenues and diversify the economy to offset potential declines in oil income due to global price volatility or shifts in demand — especially in light of voluntary and mandatory production cuts by OPEC+. As a result of government initiatives, non-oil activities now account for 53.2 percent of GDP, marking a significant step toward achieving the country's diversification goals. The Kingdom's real GDP growth in Q1 2025 was primarily driven by strong non-oil activities, including government-led projects, despite a decline in the oil sector Government activities are significantly contributing to the Kingdom's GDP growth through both direct economic output and broader support. For example, gross fixed capital formation rose by 8.5 percent year-over-year and 7.3 percent quarter-on-quarter, while government final consumption expenditure increased by 5.2 percent year-over-year and 4.5 percent quarter-on-quarter. Meanwhile, private final consumption expenditure grew by 4.5 percent year-over-year but declined by 1.7 percent quarter-on-quarter. In trade, imports rose by 2.7 percent year-over-year but fell by 10 percent quarter-on-quarter. Exports, on the other hand, increased by 1.5 percent year-over-year and surged by 12.3 percent quarter-on-quarter. The rise in fixed capital formation played a key role in supporting the Kingdom's economic performance in Q1 2025, aligning with the goals of Vision 2030 for economic diversification. This growth reflects the government's continued investment in major infrastructure and development projects tied to Vision 2030, including New Murabba, Rua Al-Madinah, Soudah Peaks and other transformative ventures. In conclusion, the Kingdom's real GDP growth in Q1 2025 was primarily driven by strong non-oil activities, including government-led projects, despite a decline in the oil sector. This increase highlights the Kingdom's economic resilience and adaptability amid global declines in oil prices and production. It also reflects the dynamism of the evolving economic landscape, propelled by momentum in non-oil sectors and supported by prudent government policies and strategic investments. Ultimately, this growth underscores steady progress toward achieving Vision 2030 objectives. Finally, it demonstrates the economy's agility in responding to global challenges and its ability to maintain balanced growth, which is essential for sustainable prosperity in the coming quarters. • Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
Zawya
21-05-2025
- Business
- Zawya
Bahrain's budget focuses on economic development
Bahrain's 2025-26 budget strategically balances fiscal discipline with a strong commitment to economic growth driven by its thriving non-oil sectors, according to a new report. In its latest GCC Budget Update analysis, Kuwait-based Kamco Invest notes that the kingdom's forward-looking budget follows a robust 2.6 per cent real GDP growth in 2024, reaching BD15.13 billion, propelled by a significant 3.8pc expansion in non-oil activities. The Finance and National Economy Ministry projects this positive momentum to continue, with real GDP expected to grow by 2.7pc in 2025, underpinned by a healthy 3.4pc growth in non-oil activities. While the budget projects a deficit of BD1.5 billion ($3.9bn) in 2025, with expenditures rising to BD4.4bn and revenues at BD2.9bn, the government has reached an eight-point agreement that includes maintaining VAT rates while adjusting selective taxes on certain items. The 2026 outlook projects a reduced deficit of BD1.1bn, with expenditures at BD4.5bn and revenues at BD3.5bn, including BD1.8bn from non-oil revenues. The budget underscores a strong focus on social welfare and development. It ensures the continuation of cost-of-living allowances for pensioners and allocates an unprecedented BD800 million for housing projects, marking the largest investment in this sector in the country's history, according to the Bahrain News Agency. Furthermore, BD688m are earmarked for healthcare investment. Significant expenditures for 2025 include BD91.7m for General Public Services, BD81.1m for Housing and Community Amenities, and BD70.6m for Economic Affairs and Infrastructure. Education reforms, infrastructure development including new schools and road upgrades, and improvements to sewage systems are also key components, all while the budget outlines measures to reduce the fiscal deficit, fostering financial stability alongside economic expansion and social well-being. Zooming out, the report underlines that GCC governments anticipate a tightening fiscal outlook for 2025, with aggregate budgeted expenditure estimated at $545.3bn, down from $554.9bn last year. Budgeted revenues are projected to decline by 3.1pc to $488.4bn from $504.1bn in 2024, primarily due to oil output cuts by Opec producers within the GCC. The projected aggregate fiscal deficit for the GCC countries is expected to widen to $56.9bn in 2025, compared to $50.8bn in 2024. Most GCC governments have based their revenue forecasts on a crude oil price of around $60 per barrel, though Saudi Arabia, UAE, and Bahrain did not disclose their specific oil price assumptions. The UAE is expected to balance its budget, while other GCC nations anticipate deficits. However, the actual deficit in 2025 could be significantly lower than budgeted due to conservative oil price estimates. Despite the tighter fiscal environment, GCC governments plan expansionary budgets, prioritising investments in healthcare, education, and infrastructure, alongside substantial funding for large-scale construction projects. A key focus remains on realigning and boosting the contribution of non-oil sectors to their economies. Saudi Arabia is set to dominate the region's finances, accounting for approximately 65.5pc of aggregate budgeted revenues and 63.6pc of aggregate expenditure in the GCC for the year. The regional project market remains robust, with the overall GCC project market index for upcoming contracts reaching $1.54 trillion as of April 2025, according to MEED Projects. Saudi Arabia leads this pipeline with $801.2bn (52.1pc), followed by the UAE at $312.3bn and Oman at an estimated $169.9bn. Crude oil prices, a major revenue driver, began the year above $80 per barrel but have since trended downwards, falling below $60/b in April 2025 following new US tariffs on China and other trading partners. While crude oil has averaged around $71 per barrel so far this year, forecasts for the remainder of 2025 suggest a full-year average of about $69.6 per barrel. Both Opec and the IEA have reduced their 2025 oil demand growth forecasts, reflecting escalating trade tensions and a deteriorating global economic outlook. Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
