GCC to Outpace Global Economic Growth in 2025, Says FAB

Maryam Pervez -

First Abu Dhabi Bank (FAB) has unveiled its 2025 Global Investment Outlook, predicting that the Gulf Cooperation Council (GCC) economies, led by the UAE, will surpass global economic growth in 2025. The region’s expansion is driven by strategic investments, economic diversification, and a thriving non-oil sector.

GCC and UAE Poised for Strong Growth

The report, titled Shaping the Future of Investments: Artificial Intelligence and the Interest Rate Environment, forecasts that GCC GDP growth will nearly double from 2.1% in 2024 to 4.2% in 2025. The UAE’s economy is set to grow even faster, rising from 4.5% to 5.6%, significantly outperforming the IMF’s global GDP forecast of 3.2%.

Michel Longhini, Group Head of Global Private Banking at FAB, stated:

"The 2025 global economic environment presents unique challenges, but the GCC region continues to stand out as a beacon of resilience and opportunity. Our report provides a comprehensive roadmap for investors to capitalize on emerging trends, from AI-driven transformation to green energy investments, while navigating the complexities of the global economy."

The report identifies artificial intelligence, green energy, and regional financial stability as major drivers of economic growth.

  • Artificial Intelligence (AI): Unlike previous tech booms, AI’s real-world applications are already shaping industries and driving mergers and acquisitions.
  • Sustainable Energy: The GCC is transitioning from an oil-exporting powerhouse to a global hub for green energy. Investments in renewables, grids, and storage are projected to rise from $1.2 trillion in 2024 to $2.4 trillion by 2030.
  • GCC Equity Markets: Stock markets in the region are expected to deliver returns of 12-13% in 2025, supported by financial stability and sector recovery.
  • Energy Investments: The Middle East’s total energy investments are set to reach $175 billion in 2024, with clean energy accounting for 15% of the total.
  • India and China: India’s steady growth and China’s shifting market dynamics present strong investment prospects, with a diversified approach recommended to manage macroeconomic risks.

GCC’s Future in Global Markets

FAB’s investment outlook highlights the strong performance of GCC equities, MENA fixed income, and global real estate, with private markets offering attractive opportunities for diversification and higher returns.

The full 2025 Global Investment Outlook report provides an in-depth, data-driven analysis of economic trends, AI-driven investments, and the energy transition, reinforcing the GCC’s position as a global financial powerhouse.

News Source: Gulf Business