By Anant Chandak
BENGALURU (Reuters) -Ramped-up oil production and diversification efforts will help most Gulf economies grow faster this year than they did in 2024, a Reuters poll of economists suggested.
Despite deep cuts to oil output since late 2022, energy prices have largely stayed subdued as heightened geopolitical tensions and U.S. trade uncertainties have affected oil demand, hurting the Organization of the Petroleum Exporting Countries (OPEC) revenues.
A separate poll expected Brent crude to average $67.86 per barrel in 2025. It has largely traded around $70 so far this year.
OPEC countries have ramped up oil production since April to regain market share from rival producers such as the United States and are encouraging tourism to diversify revenue streams.
Saudi Arabia’s gross domestic product was expected to grow 3.8% this year, the poll of 20 economists taken from July 15-28 showed. That is nearly three times the 1.3% the economy expanded in 2024.
“We had always anticipated that OPEC+ would be returning more barrels to the market this year than initially indicated, but the pace at which it is proceeding has exceeded even our expectations,” Daniel Richards, MENA economist at Emirates NBD, said.
“It is clear that the (Saudi) government remains committed to the diversification efforts and … the value of project spending that has already been implemented should be sufficient to maintain a robust pace of growth over the next several years.”
The United Arab Emirates (UAE) was expected to outperform its peers to grow 4.8% in 2025 and 4.6% in 2026, an upgrade from 4.5% and 4.2% in an April poll.
Qatar was predicted to grow 2.7% this year and accelerate to 5.4% in 2026 – its fastest expansion in 13 years – as its massive liquified natural gas (LNG) expansion project starts next year. Both Qatar and the UAE are also reducing dependence on oil by becoming tourism destinations.
“Qatar benefits from resilient gas revenues … Both countries (Qatar and UAE) are well positioned due to strong buffers and ongoing non-oil diversification,” Bader Al Sarraf, research analyst at Standard Chartered, said.
“Oman and Saudi Arabia are good examples of adapting to lower oil with fiscal discipline and reform acceleration,” he added.
Growth in Oman and Kuwait was forecast to hit three-year highs of 2.8% and 3.0%, respectively, in 2025. Bahrain was an outlier, with growth seen easing slightly to 2.9% from 3.0% last year.
While Middle East economies are largely shielded from U.S. tariff threats, other countries are under pressure to reach deals with President Donald Trump before they are slapped with heavy duties on August 1.
Inflation across the Gulf was expected to remain benign.
Poll medians showed inflation across the region holding within a 1.0%-2.5% range in 2025. Forecasts for the UAE and Saudi Arabia were pegged at 2.0% with Qatar at 1.5%.
“The general trend has been for modest headline inflation across the board. While the U.S. dollar has weakened against G-8 currencies this year, its performance against other regional currencies has been stronger, which has mitigated any rise in FX-driven import costs to the bloc,” Richards added.
(Other stories from the July Reuters global economic poll)
(Reporting and polling by Anant Chandak; Editing by Hari Kishan, Jonathan Cable and Andrew Heavens)
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