Gulf Economic Update : The Gulf'’s Digital Transformation - A Powerful Engine for Economic Diversification

Overview & Synopsis

In a period marked by global uncertainty, supply chain disruptions, and ongoing geopolitical tensions, the Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates are accelerating national reform programs to transition toward more diversified and sustainable economies. This edition of the Gulf Economic Update report has three objectives. First, it takes stock of the progress on diversification over the last decade, using well recognized metrics: diversification in economic activity, fiscal diversification, and export diversification. It examines indicators such as the share of nonhydrocarbon GDP, export composition, and fiscal revenue sources to provide a comprehensive assessment of diversification efforts. These indicators are used to illustrate how effectively Gulf economies are reducing their dependence on hydrocarbons and expanding into nonoil sectors. By benchmarking these measures against historical data and international comparisons, the analysis helps policymakers and stakeholders gauge the effectiveness of diversification strategies and refine future policies to achieve more balanced, resilient, and sustainable economic growth across the region. Second, as in previous editions, it provides an analysis of the recent economic trends, while placing them within regional and global contexts. Third, given the importance of digital development in economic growth, the report has a special focus on the common drivers of the Gulf’s digital transformation and the impact of digital government on the GCC’s economy.