The GCC healthcare market will grow at a CAGR of 12.1 per cent in the coming years driven by growing populations and the increasing prevalence of lifestyle diseases, according to a new report.
In a study released today, investment bank Alpen Capital predicted that the market would grow from $40.3bn in 2015 to $71.3bn by 2020.
The region’s outpatient market will grow from $24bn last year to $42.4bn in 2020, the bank said, with the inpatient market growing from $16.4bn to $28.9bn during the same period.
Growth in each GCC country is expected to average 11 to 13 per cent annually in the next five years and demand for beds in the region is forecast to grow 2.3 per cent from 101,797 in 2015 to 113,925 in 2020.
Within the region, the UAE healthcare market is projected to grow 12.7 per cent annually to $19.5bn by 2020, accounting for 26 per cent of total healthcare spending. Demand for beds in the country is forecast to grow 3 per cent each year to reach 13,800.
“Over the last year, we have seen a steady flow of private equity funds into the sector and the region has witnessed several successful M&A transactions. The GCC governments’ budgets are increasingly coming under pressure amid falling oil prices thereby opening up investment arenas for regional and international private sector players to make their entry into the healthcare market,” said Alpen managing director Sanjay Vig.
Drivers including the region’s growing population and a shift in age-group distribution are expected to lead to improved healthcare infrastructure and standard of care in the Gulf.
More sedentary lifestyles and a rise in related diseases including obesity, diabetes and hypertension are also expected to add to healthcare expenses and the need for specialised care centres.
Private players also face high barriers to entry including the costs of setting up a hospital and face a dearth in local talent in the near-term due to a reliance on expat workers, the bank said.