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The Gulf Cooperation Council (GCC) region is estimated to have subdued economic growth of 1.6% in 2024 but is forecast to grow at 4.2% in 2025-2026, according to the Fall edition of the World Bank’s Gulf Economic Update report.

The growth continues to be driven by the non-oil sector which has shown robust growth of 3.7%, mainly driven by the ongoing diversification efforts and ambitious reforms throughout the region.

According to the report, the region’s average inflation in 2024 remained low and stable at 2.1%, supported by subsidies, fuel price caps, and currency pegs. However, inflationary pressures in the housing sector persist in several countries. The fiscal sector has been impacted by rising government spending and reduced oil revenues, with significant variation across the region.

GCC countries face severe water scarcity, with renewable freshwater availability often below 100 cubic meters per capita annually. This forces heavy reliance on non-renewable groundwater and energy-intensive desalination.

Key recommendations offered by the World Bank for addressing the water crisis include improving water efficiency through pricing reforms, expanding wastewater reuse, and using renewable energy for desalination. The other recommendations are strengthening governance, regional cooperation, and regulatory frameworks.