By Anant Chandak
BENGALURU (Reuters) -Most Gulf Cooperation Council economies will expand steadily this year and next on rising oil production, according to economists in a Reuters poll who upgraded this year’s growth expectations for Saudi Arabia – the region’s biggest economy.
After a series of oil output cuts since early 2023, the Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, is reversing course to claw back market share from the U.S. and other rivals, increasing its output target to 2.7 million barrels per day this year.
Fears of a supply glut have dragged oil prices to a more than five-month low, but most economists argued revenues would hold up thanks to higher sales volumes.
PUSH TO INVEST BEYOND HYDROCARBONS
Saudi Arabia, the world’s largest oil exporter, will grow 4.2% this year and 4.1% in 2026, according to the October 6-15 poll of 21 economists, compared with 3.8% and 4.1% forecast in July.
“So far, revenues have held up… If OPEC+ is successful in recovering market share this will give them greater pricing power and control over global supply-demand dynamics, which will allow them to maximise revenues in the longer term,” said Farouk Soussa, MENA economist at Goldman Sachs.
“There are some risks to the growth outlook if we see a major collapse in investment due to lower oil prices, but we think this is unlikely.”
The push for higher oil revenues comes as Saudi Arabia, Qatar and the United Arab Emirates invest beyond hydrocarbons in sectors such as tourism and artificial intelligence to diversify their economies. A more persistent decline in oil prices, however, could constrain funding for those projects.
Brent crude price, which has declined around 16% so far this year, will remain steady over coming months, a separate Reuters survey forecast last month.
UAE FORECAST TO BE FASTEST-GROWING ECONOMY THIS YEAR
The UAE will be the region’s fastest-growing economy this year, poll medians predicted, before Qatar takes over in 2026. The former was seen growing 4.6% this year and next, while Qatar was expected to expand 2.7% and 5.2%.
“The UAE’s economy looks set to record another bumper year of GDP growth in 2025. But support from both oil and non-oil sectors will start to fade in 2026, causing growth to slow. This rise in output will provide a sizeable boost to GDP growth this year but that will start to ease from early next year,” noted James Swanston, senior Middle East economist at Capital Economics.
Elsewhere in the Gulf, growth in Oman was forecast to accelerate to 3.4% in 2026 from 2.5% this year, while that in Kuwait’s was predicted to hold largely steady at 2.7%, from 2.8%. Bahrain was seen growing 2.8% this year and 3.0% next.
Inflation will be mostly benign in the region with poll medians showing it holding within a 0.7%-2.4% range this year and in 2026.
(Other stories from the October Reuters global economic poll)
(Reporting by Anant Chandak; Polling by Shaloo Shrivastava; Editing by Alex Richardson)
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