Thursday, 28 August 2025
The 2025 budgets across Gulf Cooperation Council (GCC) countries reflect a cautious approach to spending and revenue planning, driven by continued oil production cuts and subdued global demand. According to a recent analysis by Kamco Invest, aggregate GCC expenditures are projected to fall to USD 545.3 billion in 2025 from USD 554.9 billion in 2024, while revenues are forecast to decline by 3.1% to USD 488.4 billion, resulting in a combined fiscal deficit of USD 56.9 billion.
The budget planning across the region largely assumes conservative oil prices—around USD 60 per barrel—even though actual average prices are forecasted to hover closer to USD 69.6 per barrel for the full year. Crude oil demand forecasts have been revised downward by both OPEC and the IEA due to increased global economic risks and trade tensions, notably the recent tariffs imposed by the United States.
Saudi Arabia is expected to account for over 65% of the region’s revenues and nearly 64% of its spending. The Kingdom has budgeted for revenues of USD 319.7 billion and expenditures of USD 347 billion, projecting a fiscal deficit of USD 27.3 billion. The government’s priorities remain focused on health, social development, and military spending. Non-oil revenue growth and enhanced tax collection are helping partially offset declining oil receipts.
Kuwait’s budget for FY 2025/2026 foresees a deficit of USD 20.6 billion, with revenues based on a crude oil price of USD 68/b and output of 2.5 million barrels per day. However, the breakeven oil price required to balance Kuwait’s budget stands at USD 90.5/b, highlighting the ongoing fiscal pressures. The share of non-oil revenue is expected to rise slightly to 16%.
Qatar, meanwhile, projects a 2025 fiscal deficit of USD 3.6 billion. With oil and gas revenues expected to fall by 3.1%, the government has committed significant allocations to healthcare, education, and ongoing development projects as part of its diversification strategy.
The UAE has balanced its federal budget at AED 71.5 billion, with increased allocations for social development and government affairs. It remains the only GCC member budgeting for a breakeven year, reflecting its relatively diversified economy.
Oman’s budget is based on USD 60/b oil and targets a deficit of USD 1.6 billion. Public spending is focused on essential sectors, including healthcare, education, and social protection, with a significant share devoted to development initiatives in line with the country’s five-year plan.
Bahrain’s budget for 2025 includes a 20.6% increase in expenditure to USD 11.7 billion against revenues of USD 7.7 billion, leading to a projected deficit of USD 3.9 billion. Despite higher fiscal pressures, the country maintains investments in housing, healthcare, and infrastructure while aiming to reduce the deficit through tax reforms and selective spending cuts.
Regionally, the project pipeline remains robust. As of April 2025, the GCC’s total planned project market stood at USD 1.54 trillion, with Saudi Arabia accounting for over half of that value. Kuwait showed the strongest year-on-year growth in awarded projects, driven by infrastructure investments aligned with its Vision 2035 development strategy.
While fiscal consolidation remains a key theme, most governments continue to prioritize non-oil economic diversification and strategic public investments, particularly in infrastructure, social services, and technology. However, the extent of success will hinge on geopolitical developments, energy market stability, and the pace of recovery in global demand.
