GCC to outpace the global economy in 2025: FAB
The UAE’s GDP is projected to rise from 4.5 per cent to 5.6 per cent, outpacing the International Monetary Fund’s global growth forecast of 3.2 per cent
First Abu Dhabi Bank (FAB), the UAE’s global financial institution, has launched its 2025 Global Investment Outlook report, forecasting that the Gulf Cooperation Council (GCC) countries, particularly the UAE, will outperform global economic growth in 2025.
The growth is attributed to strategic investments, economic diversification, and robust expansion in the non-oil sector.
The report, titled Shaping the Future of Investments: Artificial Intelligence and the Interest Rate Environment, predicts the GCC’s gross domestic product (GDP) growth rate will nearly double from 2.1 per cent in 2024 to 4.2 per cent in 2025.
The UAE’s GDP is projected to rise from 4.5 per cent to 5.6 per cent, outpacing the International Monetary Fund’s global growth forecast of 3.2 per cent.
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 2025 Global Investment Outlook report offers a comprehensive roadmap for clients to capitalise on emerging trends, from AI-driven transformation to green energy investments and robust regional market performance, while navigating the complexities of the global economy.”
Other key findings of the FAB report
The report highlights that artificial intelligence is expected to reshape industries, creating significant investment opportunities.
Unlike previous tech booms, AI’s practical applications are already driving mergers and acquisitions.
National initiatives such as the UAE’s Vision 2031 and Saudi Arabia’s Vision 2030 are fostering growth in technology, startups, and the non-oil sector. GCC equity markets are expected to deliver returns of 12 to 13 per cent in 2025, backed by recovery in key sectors and financial stability.
The Middle East is transitioning from a major oil exporter to a global hub for green energy. Investments in renewable power generation, grids, and storage are projected to rise from $1.2tn in 2024 to $2.4tn by 2030.
The region’s energy investments in 2024 are expected to reach $175bn, with clean energy accounting for 15 per cent.
India’s consistent growth and China’s shifting market dynamics offer strong investment prospects. However, the bank recommends a diversified approach to mitigate macroeconomic risks while seizing these opportunities.
The report anticipates strong performance in GCC equities, MENA fixed income, and global real estate. It also identifies private markets as an attractive avenue for diversification and higher returns.
The 2025 Global Investment Outlook report, created by FAB’s team of experts, provides a comprehensive, data-driven analysis of emerging trends such as AI and the energy transition in the Middle East, as well as developments across global financial markets and asset classes.
