Growing Non-Oil Sector in GCC: What It Means for Investors and Entrepreneurs
Muscat – The Gulf Cooperation Council (GCC) countries recorded a gross domestic product (GDP) of $2.143 trillion at current prices in 2023, marking a 2.7% decrease from $2.203 trillion at the close of 2022, according to data from the GCC Statistical Center.
Disposable GDP, which accounts for consumption and savings after taxes and other transfers, declined by 3%, falling to $1.989 trillion compared to $2.515 trillion in 2022.
The non-oil sector’s total value added in the GCC reached approximately $1.513 trillion at current prices by the end of 2023, while the oil sector contributed $603.5 billion. Notably, the non-oil sector’s share of the region’s GDP increased to 71.5% in 2023 from 65% in 2022, with an annual growth rate of 6.4%.
Over the past five years, mining and quarrying activities have had the largest average contribution to the GCC economy at 28.3%, while manufacturing has been the leading contributor within the non-oil sector, averaging 11.7%.
Most economic activities showed positive growth in 2023, with finance and insurance leading at 11.7% growth, followed closely by transportation and storage at 11.6%. Other sectors with strong growth included real estate (8.1%), public administration and defense (7.9%), wholesale and retail trade (7.6%), and education (5.5%). Conversely, mining and quarrying declined by 18.8%, and manufacturing declined slightly by 0.7%.
Regarding expenditure components of the GCC GDP, exports of goods and services reached about $1.258 trillion in 2023, accounting for 59.5% of GDP at current prices. However, this represented a 7.1% decline compared to the previous year.
Final consumption expenditure, which covers spending by households, non-profit organizations, and governments on goods and services for direct use, rose by 7.5% to $1.246 trillion. Gross capital formation, including fixed capital and assets, increased by 5.5% to $601.8 billion.
This data highlights the GCC’s gradual shift toward diversification with a growing non-oil sector despite some setbacks in key industries like mining.
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The GCC’s shift towards a more diversified, non-oil economy, with the non-oil sector now contributing 71.5% of GDP, signals a significant structural transformation. For businesses in Oman, this creates opportunities in finance, transportation, real estate, and education, key sectors showing strong growth, while investors should be cautious of the declining oil and mining sectors. Smart entrepreneurs should focus on innovation and expansion in non-oil industries to capitalize on the rising domestic consumption and increasing capital formation driving the region’s economic resilience.
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