Forecasts place global GDP growth at 3.2 percent for 2025, yet the United Arab Emirates is projected to expand at about 4 percent and the Kingdom of Saudi Arabia by 3 percent, with both economies expected to accelerate through to 2027. These figures mark a significant divergence from the global outlook and underscore the economic momentum building in these Gulf nations.
Data from NielsenIQ indicate that both the UAE and Saudi Arabia are capitalising on digital transformation initiatives, a youthful, tech-savvy populace and multifaceted international ties. They have successfully cultivated a dual-track foreign policy, cultivating relationships with both BRICS nations and Western economies, while directing substantial investment toward modernisation of their economies. These strategies are reinforcing their outperformance relative to global peers.
Economic fundamentals remain strong across key sectors. The UAE benefits from sustained growth across tourism, financial services, construction and non-oil segments, supported by fiscal stability and clear diversification efforts. Its non-oil economy now constitutes over 70 percent of GDP and entrenches resilience even amid oil price fluctuations.
Saudi Arabia’s economy has displayed remarkable robustness beyond hydrocarbons. First-quarter 2025 GDP rose by 3.4 percent year‑on‑year, outstripping initial expectations. Non‑oil sectors posted 4.9 percent growth, absorbing weakness in oil output, which contracted only marginally thanks to production policies.
Despite a modest downgrade by the International Monetary Fund for the MENA region’s growth—from 4 percent projected in October 2024 to 2.6 percent in May 2025—the Gulf Cooperation Council is still expected to register a collective increase of roughly 3 percent in 2025. That outlook factors in sustained diversification efforts like Saudi Arabia’s Vision 2030 and the UAE’s strategic non-oil investments.
Regional economic diversification has translated into strong consumer resilience. NielsenIQ reports solid spending in fast-moving consumer goods, technology and durables. In the UAE, FMCG volumes grew 2.8 percent with a 4.1 percent value uptick in Q3 2024; meanwhile, the technology and durables segment expanded 2.8 percent. In contrast, Saudi Arabia’s T&D market saw a small decline, yet its FMCG sector continued steady expansion.
Brand loyalty trends among consumers echo this vitality. Around 72 percent of UAE shoppers are willing to pay more for quality, slightly ahead of their Saudi counterparts at 71 percent. While promotional sensitivity remains high, consumers increasingly prioritise premium and value-based purchases, prompting retailers to recalibrate their strategies.
The technology sector reinforces the broader economic growth trend. NielsenIQ forecasts $68 billion in consumer tech and durables sales across the Middle East and Africa during 2025, with growth particularly focused on devices in the UAE and Saudi markets.
Global oil dynamics continue to shape the picture. A Reuters poll in October 2024 projected that Saudi Arabia would lead GCC growth in 2025, buoyed by increased oil production—up to 4.4 percent growth predicted for the kingdom, with the UAE reaching nearly 4.9 percent expansion. This oil-income boost complements and accelerates pre-existing diversification pathways.
Analysts point out that while Gulf GDP growth remains tied to hydrocarbon revenues, the rising contribution of non‑oil sectors is becoming increasingly decisive. Saudi Arabia’s transformation programmes, such as Vision 2030, emphasise infrastructure development and non-oil investment—bolstered by hosting duties for the 2029 Asian Winter Games and the 2034 World Cup. Meanwhile, the UAE has lifted non-oil GDP to over 70 percent of its economy, drawing on tourism, logistics and renewables.
Consumer confidence is being reinforced at the household level. Rapid urbanisation, a digitally connected young demographic and aggressive infrastructure lending continue to drive household expenditure and business expansion. The GCC markets are forging ahead on a trajectory markedly different from global patterns, balancing fiscal stability, strategic policy reform and economic outreach.