By George Pavel, General Manager at Naga.com Middle East
The Gulf Cooperation Council entered 2025 with a clearer “dual-engine” dynamic: non-oil growth doing the heavy lifting while hydrocarbons were capped by earlier OPEC+ quotas. The pattern was most visible in the UAE’s first-quarter prints, headline GDP up 3.9% y/y, with non-oil up 5.3% and now 77% of output, while Saudi Arabia and Qatar also posted firm non-oil momentum.
Through the second half, oil’s drag should progressively fade as OPEC+ continued its gradual unwinding of voluntary cuts. The move preserves non-oil momentum while allowing the oil sector contribution to GDP to add support into late-2025 and 2026.
In 2026, headline growth is poised to re-accelerate as the oil production unwind meets resilient domestic demand. The IMF now projects Saudi Arabia at 3.6% in 2025 (non-oil at 3.4%), stepping up to 3.9% in 2026, reinforcing the “dual-engine” narrative. The CBUAE projects the UAE to grow by 4.9% in 2025 and 5.3% in 2026, underpinned by diversified services, real estate, and manufacturing. Qatar adds a distinct tailwind: North Field East is slated to begin output mid-2026, with the World Bank seeing growth rising from 2.4% in 2025 to an average 6.5% in 2026–27 as LNG volumes ramp.
Smaller GCC economies reinforce the picture with clearer baselines. Bahrain is projected to grow at 3.5% in 2025. Oman is seen at 3.0% in 2025 and 3.7% in 2026 , while Kuwait is set to rebound to 2.2% in 2025. Collectively, the bloc is shifting toward a more predictable, investment-friendly base where the non-oil economy carries growth along with hydrocarbons output.