DUBAI: The Gulf Cooperation Council (GCC) countries, comprising the United Arab Emirates, Saudi Arabia, Oman, Kuwait, Qatar, and Bahrain, are poised to witness a notable increase in total public spending in the financial year 2025.
According to data from the Muscat-based GCC Statistical Center (GCC-Stat), public expenditures across these six nations are estimated to reach $542.1 billion, indicating a strategic shift towards fostering economic growth and development in the region.
This projected rise in public spending, compared to the 2024 estimates, reflects the governments’ commitment to accelerating infrastructure projects and stimulating growth in key economic sectors. Such fiscal measures are integral components of the GCC countries’ long-term strategic development plans, which aim to diversify their economies beyond oil dependence and establish sustainable growth foundations.
Break-even oil prices
By channeling investment into infrastructure and various sectors, the GCC states are actively preparing their economies to adapt to global economic changes and dynamic market demands.
Government revenues in the GCC region are expected to remain relatively stable in 2025, with oil prices projected to hover at moderate to high levels. Oil revenues have historically constituted the largest share of income for these countries, directly influencing their fiscal health.
Given this dependence, the governments adopt a cautious approach in estimating their budgetary parameters, including a conservative calculation of break-even oil prices. This prudence helps manage the risks associated with volatility in international oil markets and broader economic fluctuations.
Despite stable revenues, the combined fiscal outlook for the GCC countries in 2025 indicates a budget deficit estimated at $54.3 billion, with total public revenues projected around $487.8 billion.
The shortfall underscores the balancing act these governments must perform to sustain public investments without compromising fiscal stability. To address budget deficits, GCC countries plan to rely on a combination of financial reserves and both domestic and international borrowing.
This multi-pronged financing approach aims to provide adequate liquidity while maintaining investor confidence and economic stability.
