MEcon | May 2025 Edition

Saudi Arabia

Real GDP expanded by 2.7% in Q1 2025, while the non-oil PMI softened to 55.6 in April, its weakest reading since August 2024 but remaining in expansion territory. The Kingdom recorded a budget deficit of SAR 58.7 billion in Q1 2025 compared to SAR 12.3 billion a year earlier, driven by lower oil revenues, though total debt remains manageable at 29.9% of GDP versus the global average of approximately 90.0%. Furthermore, Vision 2030 diversification efforts advanced through strengthened bilateral trade ties with the US and China, new AI initiatives including HUMAIN and the AI Zone, and continued tourism investments targeting top five global destination status.

United Arab Emirates

Government initiatives in digitalization and AI adoption aim to support economic diversification objectives while attracting foreign investment and generating socioeconomic returns. Tourism infrastructure received a major boost with the announcement of Disneyland Abu Dhabi opening in the 2030s, reinforcing the UAE’s positioning as a global tourism destination. Additionally, social development programs focusing on resident wellbeing, housing, and safety gained momentum during the “Year of Community,” highlighting the government’s commitment to improving living conditions.

Qatar

International institutions forecast steady GDP growth of 2.5% in 2025, accelerating to 5.5% in 2026 upon North Field gas expansion completion, with education, infrastructure, and tourism sectors exceeding annual targets. Strengthened US commercial partnerships in non-hydrocarbon sectors support economic diversification efforts, with investments designed to generate sustainable returns for future generations. Meanwhile, April’s non-energy PMI indicated improved business conditions with output growth in manufacturing, services, and retail sectors, though new business orders declined, and labor market conditions showed signs of cooling.

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