Macroeconomic Outlook

Macroeconomic Outlook

• The average GDP growth across GCC countries in 2024 is set to reach 2.9%
• The rate of inflation is forecast to increase marginally from 2.2% to 2.4%
• In 2024, the total value of real estate projects currently planned or under construction currently stands at an estimated $1.68 trillion, up from $1.38 trillion a year earlier
• Saudi Arabia accounts for 63.1% of this total or some $1.06 trillion, followed by the UAE, which is at $409 billion

Economic growth in GCC countries showed fragmented performance in 2023, with the average rate of growth registering at only 0.6% for the year, down from 6.0% in 2022. This softer headline growth rate has largely been driven by a number of GCC countries’ oil GDP rates of growth slowing or receding into contractionary territory, averaging a decline of 3.1%. This has been in contrast to their non-oil GDP growth rates, which have increased on average by 3.1%.

In 2024, GDP growth in GCC countries is expected to strengthen, with headline growth forecast to reach 2.9%. Whilst oil GDP is expected to recover with growth set to register at 2.2%, the non-oil sector is expected to show a stronger rate of growth of 2.9% over the same period.


The rate of inflation in GCC countries fell from 3.7% in 2022 to 2.2% in 2023, a marked difference from the global rate of inflation, which stood at 6.1% in 2023. In 2024, the headline rate of inflation across the six GCC countries is expected to increase marginally to 2.4%, this is on the back of higher forecast inflation rates in Bahrain and Oman. In both countries, in 2023, the rates of inflation were relatively muted and the 2024 forecasts sit comfortably below their historic averages. In 2024, in all other GCC countries, the rates of inflation are expected to ease.



Estimates indicate that employment levels increased by 3.1% in 2023 across GCC countries. Although it is important to note that higher frequency employment data across these countries points to a stronger rate of employment growth than has been estimated. Looking ahead into 2024, forecasts show that the headline rate of employment growth in GCC countries is expected to slow to 1.8%. Saudi Arabia, the UAE and Bahrain are expected to register the strongest rates of employment growth at 3.6%, 3.1% and 2.4% respectively. The only location where forecasts indicate that there will be a contraction in employment in Qatar, where the total is expected to decrease by 1.1%.



Although there are economic headwinds at both global and national levels, the latter mostly pertaining to the oil related activities, we note that activity in the non-oil and particularly in real estate sectors remains buoyant across GCC countries. Where, as at 2024, the total value of real estate projects currently planned or under construction currently stands at an estimated $1.68 trillion, up from $1.38 trillion a year earlier. Saudi Arabia accounts for 63.1% of this total or some $1.06 trillion, followed by the UAE, which at $409 billion accounts for 24.4% of the total. Bahrain, Kuwait, Oman and Qatar share 1.3%, 3.2%, 5.2% and 2.9% of the total, respectively. 



The investment and development of the built environment, is a core part of the diversification strategies of GCC countries. The increased levels of investment showcase the seriousness of the desire to achieve such goals. In the long term, this development will help support the growth of tourism, financial and business services, logistics, manufacturing, healthcare, education and many other sectors. As commendable as much of this development is and will be, it must be done in conjunction with the continued development of soft infrastructure and regulations in each of these countries. Without the development of this soft infrastructure and the easing of regulations, the success of the built environment may be constrained in the long term.