Uncertainty Indices. GCC US Treasury holdings. Bahrain GDP. Oman trade. Qatar FDI.
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From FDI Surges to Oil Slumps: Gulf Economies Juggle Growth & Uncertainty – Weekly Insights 23 May 2025
1. Uncertainty Indices Remain Elevated after tariffs announced in Apr
- World Uncertainty Index and World Trade Uncertainty Index (which is built by counting the number of times uncertain or its variant is mentioned in EIU country reports) continues to surge in 2025.
- The data, updated as of early May, is at the highest ever for the overall World Uncertainty Index (higher than during Covid years) & nearing previous highs for the World Trade Uncertainty Index.
- The Trade Uncertainty Index (which counts the times uncertainty is mentioned in proximity to a word related to trade in EIU country reports) shows a surge to a value of 20,99.7 in Apr 2025 from 6,420 in Dec 2024. A breakdown of the index by country shows around 60 countries that have seen an increase in the trade uncertainty readings in Apr (vs Mar).
Source: World Uncertainty Index via https://worlduncertaintyindex.com/data/ (updated as of May 2025)
Based on Ahir, H, N Bloom, and D Furceri (2022): “World Uncertainty Index”, NBER Working Paper. https://www.nber.org/papers/w29763
2. China’s Treasury holdings slipped to third highest globally in Mar 2025 (prior to the tariff hike announcement); UAE is the 20th largest holder while Kuwait surged to a record-high in Mar 2025
- Foreign holdings of Treasuries grew by 8.7% mom and 11.6% yoy to a new record USD 9.05trn in Mar, crossing the previous high of USD 8.82trn (Feb ‘25).
- While Japan remained the largest holder of US Treasuries in Mar, the UK overtook China as the second largest holder of US Treasury Securities.
- UK holdings grew by USD 29bn to USD 779bn. This is the first time UK holdings are higher than China since Oct 2000.
- China’s holdings fell to USD 765bn at end-Mar, down from Feb’s USD 784.3bn and a peak of USD 1.315trn in Jul 2011. Worthwhile noting that this drop is prior to the US announcement of higher tariffs.
- Saudi Arabia remained the 17th largest global investor in Mar: its holdings grew 4.09% mom while it fell by 3.2% yoy and 4.3% ytd to USD 131.6bn.
- UAE holdings plunged by 13.0% mom to USD 104.4bn but stayed as the 20th largest holder of US Treasuries.
- Kuwait posted a gain of 5.3% mom and 13.8% yoy to a new record USD 52.7bn in Mar 2025.
3. Bahrain’s GDP grew by 2.6% yoy in 2024, supported by a fast-growing non-oil sector (3.8%) as oil activity plunged; FDI into financial sector dominated in 2024
- Real GDP in Bahrain grew by 2.6% in 2024, supported by an uptick in non-oil sector (3.8%) vs decline in oil sector activity (-4.0%)
- Real GDP growth was up by 3.4% yoy in Q4 (Q3: 2.9%), pushed by non-oil activity (4.6% following 4.8% in Q3) as oil sector plunged (Q4’s 3.5% drop vs Q3’s 6.73% dip)
- Among the non-oil non-govt sector, information & communication recorded the highest growth in 2024 (12.3% yoy) followed by professional, scientific & technical (9.5%) and accommodation & food services (5.9%).
- Financial and insurance activities, which contributed the most to real GDP in 2024 (17.2%), grew by 7.2% in 2024.
- In terms of contribution to growth to real GDP in 2024, financial & insurance sector was followed by manufacturing (15.1%), crude petroleum & natural gas (14.0%), government services (8.5%), and construction (6.6%).
- Separately, total inward FDI stock grew by 5.7% yoy to BHD 17.3bn in 2024. Financial and insurance activities accounted for close to two-thirds of Bahrain’s inward FDI stock in 2024 (65.8%), followed by manufacturing (13.5%); by country of origin of investment, Kuwait, Saudi Arabia and the UAE topped the list – each with a share of 35.2%, 23.5% and 9.8% respectively of total FDI stock.
4. Oman exports dragged down by oil & re-exports in Q1 2025
- Oil and gas exports accounted for around two-thirds of Oman’s overall exports in Q1 2025, (65.2% vs 69.5% in Q1 2024). Exports fell by 10.4% yoy to OMR 5.66bn (as oil exports plunged by 15.9% yoy to OMR 3.7bn). Imports increased by 10.8% to OMR 4.3bn) – resulting in a narrower trade surplus (OMR 1.35bn vs OMR 2.4bn in 2024).
- Non-oil exports during the year grew by 8.7% yoy to OMR 1.62bn; this comprised mainly mineral products (OMR 462mn, up by 14.1% yoy, but accounting for 8.1% share of total exports) and base metals & articles (OMR 339mn). Re-exports fell by 19.2% to OMR 351mn, with by electrical machinery & equipment and transport equipment accounting for 29.1% and 19.7% of total re-exports respectively.
- UAE was Oman’s largest non-oil trade partner: non-oil exports to UAE grew by 25.5% yoy to OMR 259mn in Q1 2025, while re-exports were OMR 126mn. Oman’s imports originated mainly from GCC: UAE was Oman’s largest source of imports (OMR 995mn, or 23.1% of total); along with Kuwait and Saudi, the 3 countries accounted for 41% of imports.
5. Qatar FDI projects more than doubled to 241 in 2024, with capex at USD 2.74bn
- Invest Qatar launched a USD 1bn programme to attract investment inflows, offering financial packages covering up to 40% of expenses for a 5-year period.
- Number of FDI projects in Qatar stood at 241 in 2024, a record-high & more than double the projects in 2023. Greenfield projects accounted for close to three-fourth of total by number (& 96% by capex).
- By capex, coal, oil and natural gas was top sector into which FDI flowed in 2024 (close to 50% of total) followed by hotels & tourism projects (4.3% of total capex in 2024). In the period 2017-2025, coal, oil and natural gas accounted for almost 60% of capex while hotels & tourism and leisure & entertainment accounted for 10% of the total.
- By source country, US and UK together accounted for 50% of total capex in 2025 (year-to-date). In the period 2017-2025, US, UK and Italy together accounted for 74% of overall capex while it was 85% including the top 5 (adding France & Germany).
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