Saudi Arabia’s economic growth is forecast to accelerate significantly in 2025, driven by an anticipated increase in oil production after two years of more modest performance. This comes as OPEC+ prepares to raise output, according to a Reuters poll of economists.
Since late 2022, the Organization of the Petroleum Exporting Countries and its allies, including Russia, have limited oil production. However, output is expected to rise starting in December, which will likely boost revenues across the six Gulf Cooperation Council (GCC) nations.
While crude oil prices are projected to remain relatively soft, averaging $76.75 per barrel in 2025—up from the current $74.8—Saudi Arabia is reportedly planning to abandon its unofficial $100-per-barrel target. This strategic shift would allow the kingdom to increase production and regain market share. Coupled with growth in non-oil sectors, this is expected to propel faster economic expansion.
A Reuters poll conducted from October 9 to 22 among 21 economists predicted that Saudi Arabia’s economy would grow by 4.4% in 2025, marking the fastest growth in three years. This would be a significant rise from the expected 1.3% growth in 2024.
GCC Economies Set for Robust Growth
Across the GCC region, economic growth is expected to reach an average of 4.1% next year, an increase from the 3.7% forecasted in July. This would surpass the projected 1.8% growth for 2024. Key GCC economies, including Saudi Arabia, the UAE, and Qatar, are pushing forward with diversification efforts aimed at reducing their dependence on oil revenues. Many economists predict that the growth rates for non-oil GDP will closely match those of oil GDP in 2025.
The UAE is expected to lead the region in economic expansion, with its economy forecast to grow by 4.9% in 2025, up from 3.7% in 2024. Meanwhile, Qatar’s growth is projected to reach 2.7%, an increase from 2.1% in the previous year.
Other GCC nations, including Bahrain, Kuwait, and Oman, are also expected to experience steady growth. Bahrain and Oman are both forecast to see 2.8% growth next year, while Kuwait is expected to grow by 2.5%. This would represent a significant improvement for Kuwait, which is expected to experience a 1.3% contraction in 2024.
Stable Inflation Outlook
Inflation across the region has remained stable, with median forecasts indicating that price pressures will remain subdued. Economists expect inflation rates to range from 0.8% to 3.0% in 2024 and 2025, further supporting economic stability in the region.
