Desert Diversification: GCC Economies Non-Oil Sector Powers Ahead Weekly Insights 4 Jul 2025

Desert Diversification: GCC Economies Non-Oil Sector Powers Ahead Weekly Insights 4 Jul 2025

1. Abu Dhabi’s real GDP grew by 3.4% yoy in Q1 2025; non-oil GDP clocks in new record contribution of 56.2%

• Real GDP in Abu Dhabi grew by 3.4% yoy to AED 291bn in Q1 2025, supported by robust non-oil sector activity (6.12% yoy). Contribution of the non-oil sector stood at a record high 56.2% of the total, underscoring the emirate’s diversification efforts.
• However, compared to Q4 2024, GDP declined by 2.8%, with a significant drop in oil GDP (-6.2% qoq to AED 127.5bn). Manufacturing sector posted significant gains (+11.5% qoq and 5% yoy), supported by growth in new industrial licenses (4.7% yoy to 89 in Q1) and industrial licences moving from under-construction to production (65% to 33).
• Manufacturing sector also had the largest contribution to GDP in Q1 2025 (9.8%), followed closely by construction (9.1% share) and financial (6.7% share) sectors. This is in line with ongoing government initiatives such as the Abu Dhabi Industrial Strategy, infrastructure projects (Adpic has 619 projects in development + aims to sign AED 47bn worth PPPs in H2 2025), robust financial sector performance (ADGM reported a 33% yoy surge in assets under management in Q1 and financial services entities up 26% yoy to 367).
• The fastest growing sectors were professional, scientific and technical activities (10.3% yoy),construction (10.2%) and financial & insurance (9.1%).

2. Oman’s real GDP grew by 2.5% yoy in Q1 2025, supported by the non-oil sector expansion

• Real GDP in Oman grew by 2.5% yoy to OMR 9.43bn in Q1 2025, thanks to the non-oil sector growing at 4.4%. Among non-oil sector, industry activities supported the uptick (7% yoy) alongside a 3.2% growth in services activities. Petroleum sector activity declined by 0.4% in Q1, given drop in crude petroleum sector (-2.2% to OMR 2.5bn), but natural gas sector gained significantly (9.5% yoy to OMR 475.3mn).
• The share of oil and gas sector in Oman’s real GDP stood at 31% in Q1 while the contribution of manufacturing, government and construction sectors stood at 9.7%, 9.5% and 9.1% respectively followed by wholesale & retail trade (8.7%).
• Services sector grew by 3.2% in Q1, given high growth rates across hospitality (11.7%), information & communication (10.6%) and financial sector (7.8%). Oman’s tourism sector had a strong Q1 (5% yoy rise in tourists & 3% vs pre-pandemic 2019) and hotels reported a 10.6% jump in revenues. Ongoing investments into the sector & the forthcoming unified GCC visa will bring further gains this year. The financial sector, along with oil & gas exploration, continue to draw higher levels of FDI. Wholesale & retail trade and transportation & storage slowed from previous quarters gains but were up 2.5% & 0.5%. Goods trade had a relatively weak Q1, especially given a 10.4% drop in exports (dragged down by oil and re-exports).

3. Qatar’s real GDP accelerated by 3.7% yoy in Q1 2025, with the hydrocarbon and non-hydrocarbon sectors growing by 1.0% and 5.3% respectively

• Qatar’s real GDP grew by 0.3% qoq and 3.7% yoy in Q1 2025, thanks to gains in the non-mining and quarrying sector (+5.3% yoy) also accounting for 63.6% of overall GDP. Growth was supported by both hydrocarbon and non-hydrocarbon sectors, rising by 1.0% yoy and 5.3% respectively. Compared to Q4 2024, mining & quarrying gained 2.9% while non-mining & quarrying posted a 1.2% drop.
• A breakdown by sector showed the fastest upticks in wholesale & retail trade (14.6% yoy in Q1) as well as accommodation & food services activities (13.7%). Contribution by five non-mining & quarrying sectors (construction, wholesale & retail trade, manufacturing, real estate and financial & insurance) accounted for 40.7% of overall GDP and close to two-thirds of non-mining and quarrying GDP in Q1.
• Despite lower crude output (at around 600k barrels per day vs peak of 780k bpd a decade ago), Qatar is still heavily reliant on its hydrocarbons sector (36.4% of overall GDP in Q1), with oil & gas revenue accounting for 86.7% of overall fiscal revenues in Q1. Near-term GDP growth will be supported by an expansion of Qatar’s LNG capacity (and recently signed long-term alliances) along with increased public investment and inbound tourism.

4. Credit growth in Saudi Arabia outpaced deposit growth for the 16th straight month in May and consumer spending accelerated. Overall deposits grew an average 9.2% in Jan-May 2025; despite posting negative yoy readings for the past ten months, govt deposits surged by 8.5% mom in May. Claims on the public sector grew faster than that on the private sector in all months this year (latter accounts for more than ¾-ths total claims)

5. Despite strong acceleration in UAE’s deposit growth (avg of 10.8% in Q1 2025), gross credit growth lagged (9.5%). Share of loans to the private sector was almost 3/4th of domestic credit in Mar; and loans to business and industrial sector accounted for almost 2/3-rds of credit to the private sector. Lending to the SMEs rose to the highest since Q2 2023. Personal loans for consumption accounted for more than 1/4th of disbursed loans in Dec, followed by construction & real estate (14%), financial institutions (11%).

6. Oil exports dragged down Saudi exports in Apr; UAE largest non-oil exports partner

• Saudi Arabia’s overall exports fell by 4.8% mom and 10.9% yoy to SAR 90.3bn in Apr 2025, with oil exports down by 7.2% mom and 21.2% yoy. Share of oil exports to overall exports dipped to 68.6% (Mar: 70.3%).
• Non-oil exports rose 6.8% yoy to SAR 17.7bn (but fell by 8.3% mom) while re-exports surged 72.0% yoy and 20.7% mom to SAR 10.7bn.
• Imports grew by 18.3% yoy to SAR 76.20bn in Apr 2025 (but was 1.3% lower in monthly terms). This resulted in a narrower trade surplus – SAR 14.2bn vs Mar’s SAR 17.7bn and less than half of Apr ‘24’s SAR 37.0bn.
• China, Japan and South Korea were the top destination for oil exports and top 5 & 25 nations accounted for 55.1% and 94.5% of total oil exports.
• Plastics, rubber and their articles was the largest segment of non-oil exports (21.7%), followed closely by chemicals & its products (21.0%) while UAE the largest destination of overall non-oil exports (29.5%).
• Eastern Asia was the largest destination region for exports from Saudi Arabia.
• China was the largest trade partner for KSA in Apr: it received for 12.6% of Saudi exports and was source nation for one-fourth of KSA imports.
• From West Asia region, UAE was the top trade partner: received 9.8% of Saudi’s total exports and was the source for 6.8% of Saudi imports.

7. Unemployment rate of Saudi citizens fell sharply to a new-low of 6.3% in Q1 2025

• Unemployment rate of Saudi citizens fell to a new record-low of 6.3% in Q1 2025 (Q4: 7.0%). The revised Vision 2030 target now stands at 5% target by 2025.
• Overall unemployment rate including expats also eased to 2.8% (Q4: 3.5%).
• Saudi female unemployment rate declined to a new low of 10.5% (Q4: 11.9%). All except 15-24 age group posted a fall in unemployment rate (vs Q4).
• Saudi female labour force participation inched up to 36.3% (Q4: 36.0%); remaining slightly lower vs high of 36.5 in Q3 2022. Employment to population ratio for Saudi women also rose to a record-high 32.5 in Q1 (Q4: 31.8); this compares to 63.8 among Saudi men (Q4: 63.4).
• Female citizens’ wages averaged SAR 9,683 in Q1 (men: SAR 11,459); wages of women aged 55+ was highest (SAR 12,895). Male-female wage gap is high & gap is widest in 45-54 age group.
• Lower Saudi unemployment is associated with higher non-oil sector growth.

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