Middle East Economy Watch - February 2025

In the months since our last Economy Watch report, several significant developments have emerged in the region. 

First, OPEC+ decided to scale back its planned production increases in 2025 by about two-thirds and extend the tapering of cuts into 2026. This decision to extend cuts, along with President Trump’s push to maximise US fossil fuel production could reshape global oil markets, creating uncertainty for the trajectory of oil prices in 2025. However, the outlook on non-oil sector growth across the GCC economies continues to be robust.

Second, we explore Saudi Arabia's efforts to balance fiscal prudence with ambitious investment goals, as it recalibrates its priorities to strengthen the private sector, enhance tourism and advance infrastructure projects. Many of these transformative initiatives are taking place in Riyadh, including the Riyadh Metro, New Murabba, Diriyah Gate, and King Salman Park, alongside preparations for hosting mega events like the 2034 FIFA World Cup. These projects reflect Saudi Arabia’s Vision 2030 aspirations to drive economic diversification, sustainability and improved quality of life.

Another notable theme we spotlight is how GCC economies are broadening their tax bases to diversify non-oil revenue, enhance fiscal sustainability and respond to international tax developments, such as the new global minimum tax for large multinational enterprises.

Our chart of the quarter, taken from our recently released 28th Annual CEO Survey: Middle East findings, highlights the sustained confidence among regional CEOs in their company's revenue growth and the overall economic outlook for this year.

The economic outlook for 2025 is expected to be positive, buoyed by cautious optimism around the improving geopolitical situation in the region.