GCC governments are advancing efforts to diversify their economies by reducing dependence on oil revenue and fostering an export base centered on high-value-added goods and services. According to an analysis by Strategy&, a global consulting business, in December, “If GCC countries craft and successfully execute a masterplan for the export of non-oil goods, they could see the value of these exports grow to a massive $1 trillion annually by 2030, from $202 billion (2022 baseline)”

The $1 trillion figure is based on “past export growth, the comparative advantage of GCC countries in key export areas and extrapolating top quartile export growth manifested by global benchmarks,” said the analysis.

In the GCC region, the Gulf Economic Update by the World Bank in June projected an increase in the medium-term economic growth to 3.2% in 2025 and 4.50% in 2026, up from 1.7% in 2024. Notably, this upward trajectory would be fueled largely by the non-oil sector, “which has demonstrated solid expansion at 3.7%,”  the World Bank noted. The region’s growth is also likely to be driven by the expected rollback of OPEC+ oil production cuts.

While this may increase competition in the Middle East’s non-oil export markets, diversification of GCC exports is not yet strong. “Diversification is still in its early stages,” said Mohammad Fheili, a risk strategist, in April. “The non-oil economy, while growing, isn’t yet mature enough to offset a drawn-out global slowdown.”

A key for diversification in the GCC is attracting both talent and investment. According to a March policy report by Konrad-Adenauer-Stiftung, a German think tank, the GCC’s shift toward a more knowledge-based economy has created a demand for skilled labor. To fuel this shift, “the GCC has implemented extensive diversification plans that prioritize sustainable growth, foreign investment, and increased national and expatriate employment in high-skill sectors, where the demand is not entirely fulfilled by the national workforce.”

Trading non-oil

According to figures released by the Statistical Center for the Cooperation Council for the Arab States of the Gulf (GCC-Stat), the region’s nominal GDP increased by 1.5% in Q4 2024 compared to 2023, rising from $579 billion. Non-oil activities contributed 77.9% of total nominal GDP.

Within the non-oil economy, key contributors in 2024 included manufacturing (12.5%), wholesale and retail trade (9.9%), construction (8.3%), public administration and defense (7.5%), finance and insurance (7%), real estate activities (5.7%), and a collective 27% from other non-oil sectors.

Notably, trade among GCC nations is gaining momentum, reflecting the region’s economic resilience and diversification. “Trade among GCC hit $1.5 trillion in 2024, ranking sixth globally and representing 3.2% of world trade,” Arab News reported in October.

“The bloc collectively posted a $110 billion trade surplus, the third-largest worldwide,” said Khalid Ali Al-Sunaidi, assistant secretary-general for economic and development affairs at the GCC General Secretariat, during the 61st preparatory meeting of GCC trade ministry undersecretaries in October.

He said intra-GCC merchandise trade was about $146 billion in 2024, with an annual growth rate of 9% compared to 2023 and a 10-year average annual growth of 5.3% for non-oil goods.

Despite the drive by GCC member states to reduce dependence on energy revenue and maximize their non-oil exports, “they still have high non-oil trade deficits that expose the region to global market volatility, supply-chain disruptions and inflation, particularly in food and essential goods,” according to a 2025 report by PWC.

The report showed that in the five quarters through the end of September 2024, Saudi Arabia’s non-oil imports were worth almost four times the value of its non-oil exports. In the UAE, non-oil imports were more than double the value of non-oil exports in 2023

Saudi Arabia

Saudi Arabia has forecast real GDP growth of 4.4% in 2025, with non-oil sector growth of 5%, supported by increased domestic demand and improved employment rates, according to a pre-budget statement in September.

Non-oil exports of goods and services hit a record high of $137 billion in 2024, marking a 113% increase since the launch of the Saudi Vision 2030 plan, Reuters reported in April. Abdulrahman Althukair, CEO of the Saudi Export Development Authority, attributed the jump in non-oil exports to the “sustained efforts in economic diversification”.

According to the Riyadh Bank purchasing managers’ index (PMI) survey, Saudi Arabia’s non-oil private sector economy logged its strongest improvement in six months in September, rising from 56.4 in August to 57.8. A PMI score above 50 represents growth, while a reading below 50 indicates contraction.

China remained the top destination for Saudi exports in July, accounting for 14% of the total, followed by the United Arab Emirates at 10.6% and India at 9.4%. Together with South Korea, Japan, the United States, Egypt, Malta, Poland, and Turkey, the top 10 buyers accounted for 65.7% of exports.

UAE

With non-oil sectors accounting for 75.5% of the United Arab Emirates’ GDP by the end of last year, Minister of Economy Abdulla bin Touq Al Marri emphasized “these indicators reflect the sustained success of the nation’s economic strategies, which are driving the transition toward an innovative, knowledge-based and sustainable economic model aligned with global trends and emerging technologies.”

In July, Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi announced non-oil foreign trade growth of 24.5% during the first half of 2025. “The total value reached over AED1.7 trillion ($462.9 billion), a rate 14 times higher than the global average of approximately 1.75%, reflecting the strength of the U.A.E.’s long-term economic strategies and forward-looking policies.”

In the first quarter of 2025, non-oil exports increased by 41.3% compared to the same period in 2024, reaching AED 172.7 billion, according to the UAE’s Quarterly Economic Review in September.

Emirates News Agency (WAM) reported in June that the trade sector contributed 16.8% to non-oil GDP in 2024, followed by manufacturing (13.5%); financial and insurance activities (13.2%); construction and building (11.7%); and real estate activities (7.8%).

“Our goal to grow non-oil foreign trade to AED 4 trillion by 2031 will be achieved within the next two years; four years ahead of schedule,” Prime Minister Sheik Mohammed bin Rashi Al Maktoum said in June.

Data by S&P Global noted the UAE’s non-oil PMI rose for the second consecutive month in September, climbing from 53.3 to 54.2.

Attracting talent

Aside from exports, the ongoing transformation in the GCC non-oil landscape is driving demand for skilled talent across emerging sectors. “The international talent infusion not only accelerates progress within key sectors, but also drives cultural and intellectual exchange, fostering long-term growth and innovation,” said Raymond Khoury, partner and public sector practice lead at Arthur D. Little, Middle East.

GCC countries are actively fostering environments that welcome global talent. According to the World Economic Forum (WEF) in February, “GCC countries are promoting entrepreneurship and innovation by establishing sandboxes, hubs, incubators and accelerators that encourage startups, attract skilled professionals and create ecosystems that cultivate talent.”

The WEF added, “GCC member states are also expanding into emerging industries through golden schemes that have been designed to attract investment, retain talent and position GCC countries as global leaders.”

The UAE “Golden Visa” scheme and Saudi Premium Residency visa, or “Saudi green card,” are designed to give qualifying investors, talented individuals, and others permanent residency. They aim to attract entrepreneurs and professionals in fields like medicine, science, engineering, and education.

In Saudi Arabia, according to a May economic outlook by the National Bank of Kuwait, “continued regulatory reform progress drove a notable rise in commercial license registration in 2024.” The reforms included amendments to the commercial law to promote investment, streamlining the business setup process, special economic zones, the ongoing digitization of services, and the introduction of a VAT rebate for tourists to enhance competitiveness.

Such reforms could also support FDI inflows, “which fell by 19% to a below-target $21 billion in 2024,” NBK outlook noted.

Additionally, Qatar’s five-year residency permit allows talented individuals and entrepreneurs to work and reside in the country for five years.

Through such a strategy, GCC countries reduce business costs to attract investment. “All GCC member states have established Special Economic Zones, providing significant business incentives. These include competitive corporation tax rates, duty-free access to GCC markets, and enabling foreign nationals to fully own companies they establish there, such as in Bahrain’s International Investment Park,” the WEF said in June.

Egypt unaffected, so far

Unlike the PMI growth seen in the GCC,  seasonally adjusted PMI in Egypt fell to 49.2 in August from 49.5 in July, remaining below 50 for the sixth consecutive month, according to the latest S&P Global Egypt Purchasing Managers’ Index (PMI).

The reasons behind the downturn are falling output and new orders reported by Non-oil companies for the sixth consecutive month. The report noted that activity fell across all monitored sectors, while inflation concerns persisted as Egypt’s official annual consumer price index (CPI) fell to 13.9% in July.

Notably, Egypt’s total exports rose to $45.3 billion in 2024, up from $42.6 billion the previous year, a 6.5% increase, the latest CAPMAS foreign trade report in September highlighted.

From January to September 2025, Egypt’s non-oil exports signaled a 21% growth to $36.6 billion— up from $30.3 billion during the same period in 2024, an increase of $6.2 billion, according to the latest report issued by the General Organization for Export and Import Control (GOEIC) on Egypt’s foreign trade performance.

Finished goods made up the largest share of exports (54.1%), followed by semi-finished goods (23.2%) and raw materials (11.2%).

By region, Arab countries received the largest share (36.2%) of Egypt’s exports.

Arab countries remained the top importers of Egyptian food products during the first half of 2025, purchasing goods worth $1.9 billion, representing 47% of total exports despite a 3% decline in value, an August report from the Food Export Council (FEC) noted.

The GOEIC report showed that the UAE emerged as the top destination for Egyptian non-oil exports. It imported goods worth $5.9 billion, a 169% increase from approximately $2.2 billion in 2024.

An official statement in October has noted that the Ministry of Investment and Foreign Trade aims to increase non-oil exports to all foreign markets through a trade policy focused on enhancing competitiveness and boosting the added value of exports.

This includes opening new markets, streamlining trade procedures, maximizing the benefits of the export rebate program, and leveraging free trade agreements signed between Egypt and a wide range of countries and regional and global economic blocs, the statement highlighted.