Combined GCC GDP Expected to Decline by 2.4% in 2026 Due to Oil Pressures

International estimates recorded an expected decline in the gross domestic product of the Gulf Cooperation Council (GCC) countries by 2.4% in 2026 compared to the previous year's performance, amid oil price pressures.

This expected decline stems mainly from the oil activity component, where the commitment of OPEC+ countries to production cuts led to a drop in the volume of Gulf crude exports and a corresponding decrease in government revenues.

In contrast, the non-oil sector in most Gulf countries maintained its positive momentum, particularly in the UAE and Saudi Arabia, significantly mitigating the severity of the expected overall decline.

Analysts believe this decline is temporary and tied to OPEC+ decisions, and that non-oil sectors will serve as the primary driver of growth in the long term. They emphasize that economic diversification has become a necessity, not a choice, for Gulf countries in the face of recurring oil volatility.

What do these terms mean?

Gross Domestic Product (GDP): The total value of all goods and services produced within a country or group of countries during a year, serving as the most widely used metric to measure the size and growth of an economy.

OPEC+ Production Cut: A decision taken by the alliance of oil-producing countries to reduce the quantities pumped into global markets, aimed at supporting prices or adjusting the balance between supply and demand.

Non-Oil Sector: The sum of economic activities that do not depend on oil and gas, such as retail, tourism, finance, and manufacturing, with its growth considered an indicator of successful economic diversification.