Gulf is a region in bloom?
The Gulf Cooperation Council region, encompassing Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman, is undergoing a transformation. Historically tied to energy prices, the region is now diversifying its economies and enhancing its attractiveness for domestic and international investors. This is being reflected in equity and bond market performance. GCC economies are projected to grow at a rate of around 4 percent per annum over the next five years, more than double the gross domestic product growth rate of advanced economies. This growth is fuelled by the region’s dominance in global energy markets but also by government-led initiatives aimed at diversifying local economies away from oil and gas.
Emerging markets and the GCC economies
The IMF forecasts that growth in emerging market and developing economies is expected to remain steady at 4.2 percent for both 2024 and 2025. This stability is attributed to a slowdown in emerging and developing Asia, which is balanced by increased growth rates in the Middle East, Central Asia, and Sub-Saharan Africa. Specifically, growth in emerging and developing Asia is anticipated to decrease from an estimated 5.6 percent in 2023 to 5.2 percent in 2024 and further to 4.9 percent in 2025, marking a slight upward adjustment from the January 2024 WEO Update. In emerging and developing Europe, growth is forecast at 3.2 percent in 2023 and 3.1 percent in 2024 and is expected to ease to 2.8 percent in 2025, following an upward revision of 0.5 percent points for 2023 and 0.3 percent points for both 2024 and 2025 since January 2024 WEO Update. In Latin America and the Caribbean region, growth is projected to decline from an estimated 2.3 percent in 2023 to 2 percent in 2024, before rebounding to 2.5 percent in 2025. Growth in China is expected to decelerate from 5.2 percent in 2023 to 4.6 percent in 2024 and further to 4.1 percent in 2025. This slowdown is due to the diminishing impact of the post pandemic surge in consumption and fiscal stimulus, combined with ongoing challenges in the real estate sector. In contrast, India’s economy is forecasted to maintain robust growth rates of 6.8 percent in 2024 and 6.5 percent in 2025, supported by strong domestic demand. In Brazil, economic growth is anticipated to moderate to 2.2 percent in 2024, influenced by fiscal consolidation efforts, the delayed effects of tight monetary policies, and a reduced contribution from the agricultural sector. The IMF predicts a significant increase in economic growth for the GCC region, from 0.5 percent in 2023 to 2.5 percent in 2024. The limited growth in GCC economies in 2023 was primarily attributed to continued oil production cuts. Nevertheless, the non-oil sectors across several GCC countries are showing robust growth, driven by an upsurge in domestic demand, enhanced gross capital inflows, and the execution of structural reforms aimed at diversifying the economy beyond oil dependency.
In 2025 GCC set to propel global sukuk issuance to $200bn
Global sukuk issuance will reach between $190 billion and $200 billion in 2025, driven by the anticipated growth in the GCC region, a senior S&P Global Ratings said.
Total issuance reached $193.4 billion in 2024, down slightly from the previous year’s $197.8 billion.
Foreign currency-denominated issuance will contribute $70 to $80 billion to this year’s sukuk issuance. The segment saw a 29 percent rise to $72.7 billion in 2024.
Saudi Arabia and Kuwait led the way, with banks, corporations and the Saudi government stepping up their foreign-currency issuance, said S&P Global Ratings Islamic Finance Head.
2025: Transformative growth for the GCC
GCC economies are set for a significant upturn in 2025. With ambitious diversification strategies and booming non-oil sectors leading the charge, the region is poised for accelerated growth. Recent reports from the IMF predict a sharp rise in economic expansion across the GCC, with the overall growth rate hitting an impressive 4 percent.
Slow restart predicted for GCC financial aid to Lebanon
A resumption of badly needed GCC financial aid to Lebanon may take time, even though most Gulf countries have given their blessing to the new Lebanese president Joseph Aoun, according to observers.
The six nations of the Gulf Cooperation Council were previously among the biggest aid donors and investors in Lebanon, before they cut assistance as Iranian influence in the country through its ally Hezbollah increased.
Relations soured in 2021 after the then Lebanese information minister made hostile comments defending Yemen’s Houthis.
In 2025 GCC IPO pipeline resilient
The outlook for initial public offerings in 2025 remains buoyant in the GCC after a bumper 2024 that saw 53 IPOs on the back of resilient investor demand and GCC governments continued push to diversify their economies and deepen capital markets, market watchers said.
This year, the pipeline looks promising, they said. Based on the status of IPO offering provided by Kamco Invest, there are around 40 IPOs already in the pipeline in the GCC, with 30 IPOs already announced, four have been mandated and six rumoured IPOs.
Hong Kong, Gulf nations seek synergies to deepen ties
Hong Kong and countries in the Middle East are looking to deepen collaboration in finance, artificial intelligence (AI), logistics and big infrastructure projects, government officials said on Tuesday.
The city’s strong capital market could help Gulf Cooperation Council (GCC) countries raise funds to finance projects as they seek to diversify their economies, said Gulf officials, who welcomed investment from Hong Kong. The GCC comprises Saudi Arabia, United Arab Emirates, Oman, Qatar, Bahrain and Kuwait.
“Under the national investment strategy, the kingdom is poised to deepen its collaboration with Hong Kong,” Faris Algarni, assistant deputy minister of investment of Saudi Arabia, said in a panel discussion in Hong Kong.