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THE GCC economies have displayed remarkable resilience throughout 2025, anchored by a massive $3.1 trillion project pipeline and a banking sector that has surpassed the $4 trn mark in total assets.
Despite a softening in global crude oil prices and a cooling IPO market, the region’s fiscal health remains robust as it enters 2026 with a positive growth outlook, according to the latest annual review by Kamco Invest.
Financial markets across the region saw a year of contrasting fortunes. The MSCI GCC index recorded a modest gain of 1.6 per cent for the year, significantly outperformed by Oman, which led regional gains with a 28.3pc surge, and Kuwait, which rose by 21pc.
Conversely, Saudi Arabia’s market witnessed a 13pc decline, contributing to a 12.3pc drop in the total GCC value traded, which fell to $605 billion from $690bn in the previous year.
The primary market also experienced a slowdown, with 46 initial public offerings (IPOs) raising $5.9bn in 2025, a sharp decrease from the $12.9bn raised through 53 listings in 2024.
The regional banking sector continued its expansion, with total assets reaching $4trn as of September 2025. The UAE maintained its position as the largest banking market with $1.418trn in assets, followed by Saudi Arabia at $1.318trn and Qatar at $583bn.
In the fixed income space, total issuances remained steady at $207.3bn, with corporate bonds and sukuk making up the bulk of the activity at $71.9bn and $57.3bn, respectively.
This stability was maintained even as regional central banks followed the US Federal Reserve in implementing a 0.75 percentage point rate cut during the year.
The regional economic engine appears increasingly decoupled from oil price fluctuations, as the total GCC project market pipeline hit $3.12trn despite Brent crude prices averaging $63.10 per barrel in 2025, down from $74.58 in 2024.
Saudi Arabia remains the dominant force in infrastructure, with $2.05trn in projects planned or under execution, while the UAE follows with $1.13trn.
A significant 61.7pc of the total project value, or approximately $1.92trn is currently in the design phase, signalling a long-term commitment to development and economic diversification.
Looking ahead, the GCC’s fiscal balance is projected to strengthen from $19.6bn in 2025 to $23.1bn in 2026. Economic growth is expected to accelerate, with real GDP growth forecast of 4.3pc in 2026, up from 3.9pc in 2025.
This growth is anticipated to be driven by a significant 5.9pc rebound in Oil GDP, while the non-oil sector is expected to maintain a steady growth trajectory of 3.6pc as the region continues its strategic transformation efforts.
avinash@gdnmedia.bh
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