Gulf economies are on a stable track despite risks

Significance

The IMF has revised downwards its forecast for Saudi GDP growth in 2024 to 2.7% but raised its 2025 forecast to 5.5%. This reflects a positive medium-term outlook for the Gulf Cooperation Council (GCC) countries, as they deploy gains from high energy prices to invest in diversification.

Impacts

• Renewable energy, including green hydrogen, will be a core area for new investment, along with real estate, leisure and tourism.
• GCC financial markets will see vigorous activity, with a steady stream of IPOs.
• Regional conflicts would likely generate energy price spikes, resulting in short-term revenue gains.