The GCC is somewhat insulated from the global “rocky recovery” and will see growth of 3.2% this year as countries push ahead with their national visions, according to the global consultancy, PwC.

The region is supported by oil prices and strong sovereign and corporate balance sheets, PwC said, and despite the expected global growth slowdown, growth in the GCC is expected to be resilient at 3.2%, compared with 2.8% globally, enabling further reinvestment.

The non-oil economy is recovering, even in the hardest-hit sectors, fuelled in-part by returning numbers of expat populations, PwC’s new report said.

However, the wider Middle East remains more vulnerable to global trends of persistent high inflation, interest rates and geopolitical uncertainty, the report said.

Overall, progress on the GCC’s key performance indicators (KPIs) across the region is promising, with some room for improvement on others, it added.

For example, at the halfway mark for its Vision 2030, announced in 2016, Saudi Arabia has seen female workforce participation reach 36%, exceeding the target of 30%.

The report added: “Abu Dhabi has made significant progress in diversifying its economy, with non-oil GDP reaching a 59% share in 2021, up from 41% in its baseline of 2005 and close to its 2030 target of 64%.

“However, it has been less successful in diversifying government revenue. It does not disclose non-oil revenue directly but combining IMF Article IV estimates for overall UAE oil revenue with Abu Dhabi’s most recently disclosed fiscal outturn in 2020 suggests that non-oil revenue was only about 28% of the total, far below its 2030 target of 49% and only slightly above its 2005 baseline of 23%.”

“The rollout of corporate income tax this year will help somewhat but these effects are likely to be felt only in 2025 and beyond,” the report added.

Richard Boxshall, partner and chief economist said countries were advancing towards their national vision goals, and he expected increased momentum and reinvestments to increase with COP28, hosted by the UAE, on the horizon.

In 2022, the five GCC states for which regular tourism data is available, Saudi Arabia, UAE, Qatar, Bahrain, and Oman, showed a lag of -8% behind 2019 levels, however, by Q4, Qatar, Saudi and Bahrain were well above Q4-19 levels, the report said.

While the COVID-19 pandemic caused expatriate populations to decrease, they started to rebound in 2022 by 2.8%, and are expected to surpass 2019 levels later this year, the report concluded.

(Reporting by Imogen Lillywhite; editing by Brinda Darasha)

(Imogen.Lillywhite@lseg.com)