Gulf Economic Outlook: The Role of Fiscal Policy in Navigating Gulf Countries Through Global Economic Uncertainty

           In partnership with The World Bank

The first half of 2025 was marked by heightened global economic uncertainty driven by rising protectionism and conflict. This has resulted in volatility in global oil demand, production, and prices, with implications for Gulf economies. Gulf Cooperation Council countries remain reliant on global energy markets despite their ongoing economic diversification efforts. Notable progress has been made in strengthening macroeconomic foundations, a precondition to sustained growth, and implementing reforms to improve the business, investment, and employment environment. Continuing with these reforms is critical. Many of the Gulf countries have considerable fiscal space to help them manage periods of global economic volatility and finance new investments that support their diversification agendas. The success of the reforms, however, will depend on further efforts to improve productivity growth, ensuring that fiscal policy is sustainable with heightened investment and that political support for reforms is maintained. 

AGSI and the World Bank Group are pleased to present a discussion of the “Gulf Economic Update” published by the World Bank in June. The report provides a detailed assessment of the GCC economic outlook, identifies recent economic successes in the region, and discusses priorities for future reforms. The report also takes an in-depth look at Oman, where reforms since 2022 have significantly strengthened fiscal and broader economic conditions. 

Introduction:

Amb. Douglas A. Silliman, President, AGSI

Safaa El Tayeb El-Kogali, Division Director for the Gulf Cooperation Council, Middle East and North Africa, Afghanistan and Pakistan Region, World Bank

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