Doha - Qatar and its Gulf Cooperation Council (GCC) peers are poised for stronger economic growth in 2025 and 2026, underpinned by higher oil output, resilient non-oil sectors and robust domestic demand, according to the latest ICAEW Economic Insight Q3 2025 report, produced byOxford Economics.

The report forecasts GCC GDP to expand by 4.1 percent in 2025, nearly double the pace recorded last year, before accelerating further to 4.6 percent in 2026. The region’s growth trajectory reflects both oil and non-oil gains, reinforcing its resilience in the face of global trade tensions, tariff headwinds and softer oil prices.

Energy-sector growth is expected to rise by 4.9 percent in 2025 and 6 percent in 2026, while non-oil sectors are projected to grow by around 4 percent in 2025, supported by strong labour markets, credit growth and continued diversification efforts.

Despite an expected slowdown in global GDP growth to 2.7 percent in 2025, the GCC is expected to remain an outperformer. Saudi Arabia’s non-oil exports rose by 16.5 percent year-on-year in the first half of 2025, while the UAE recorded a surge of nearly 45 percent, underscoring the region’s growing role in global trade.

Fiscal positions across the GCC remain mixed, with Qatar and the UAE projected to maintain surpluses, while Saudi Arabia, Bahrain, Kuwait and Oman are likely to record deficits. Inflation is expected to remain relatively contained, averaging 2.1 percent in 2025 before rising moderately to 2.6 percent in 2026.

Qatar’s economy is forecast to expand by 2.7 percent in 2025 before accelerating to 4.8 percent in 2026, supported by the expansion of the North Field LNG projects that will significantly boost production capacity and fiscal revenues.

Kuwait is expected to record GDP growth of 4 percent in 2025, fuelled by a 7 percent expansion in the oil sector, with the recent passage of a debt law marking an important step in strengthening fiscal flexibility and supporting longer-term diversification.

The UAE’s economy is projected to grow by 5.1 percent in 2025, with non-oil GDP rising 4.7 percent and now accounting for 77 percent of overall output, while Saudi Arabia is forecast to expand by 4.2 percent, driven by around 5 percent annual growth in non-oil sectors such as construction, trade and financial services.

Commenting on the findings, Hanadi Khalife, Head of Middle East at ICAEW, said the GCC economies are showing that diversification is more than policy and has become a measurable driver of resilience. She noted that with non-oil sectors powering growth in Saudi Arabia and accounting for the majority of GDP in the UAE, alongside fiscal reforms in Kuwait, the region is turning global challenges into opportunities for transformation.

Scott Livermore, ICAEW Economic Advisor and Chief Economist and Managing Director at Oxford Economics Middle East, said the GCC is not only recovering from oil production cuts but is also reshaping its growth model.

While Kuwait’s fiscal reforms and Qatar’s LNG expansion provide confidence in the medium term, he said, recent geopolitical escalations involving Qatar add some uncertainty to the near-term outlook. Even so, he stressed, the region’s mix of reforms, energy growth and strong non-oil diversification positions it to outperform global peers.

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