Gulf Countries Respond to U.S. Trade Pressure With Trillion Dollar Plans
Over the past decade, the Gulf Cooperation Council (GCC), comprising Saudi Arabia, Qatar, the UAE, Bahrain, Kuwait, and Oman, has advanced bold strategies to reshape its economies by reducing reliance on oil while developing new sectors like renewable energy, tourism, financial services, and digital innovation. Charting a course toward long-term economic resilience, these nations have launched sweeping infrastructure projects and enacted reforms designed to attract foreign investment. And it has worked swimmingly, so far.
During his May 2025 tour of Riyadh, Doha, and Abu Dhabi, U.S. President Donald Trump announced investment pledges totaling over $2?trillion, according to the White House, while some outlets, such as Al?Monitor, reported figures nearing $3.2?trillion. These announcements included roughly $600?billion from Saudi Arabia, $1.2?trillion from the UAE, and $1.4?trillion from Qatar, though most remain at the memorandum-of-understanding stage.
Meanwhile, the Trump administration’s “Liberation Day” tariff, a baseline 10% customs duty on imports from all countries, including the GCC, has posed a modest headwind for regional exporters.
Nonetheless, GCC states have responded proactively by deepening U.S. economic ties, scaling up their AI and data infrastructure, and doubling down on non?oil growth strategies—efforts that underscore their determination to build more diversified, stable, and climate-aligned economies.
These diversification efforts, coupled with the recent rollback of OPEC+ oil production cuts, are paying off, with the economies of the oil-rich monarchies thriving again. The World Bank has projected that the GCC economy will expand by 3.2% in 2025 and 4.50% in 2026, a significant rebound after growing at an anemic 1.7% clip in 2024 and just 0.3% in 2023. In contrast, the biggest Bretton Woods institution has forecast that the global economy will grow at a slower 2.3% clip in 2025, slowing to its weakest pace since 2008 outside of recessions, before a tepid recovery averaging 2.5 percent over 2026-27. This downward revision from earlier forecasts is attributed to heightened trade tensions, policy uncertainty, and the dampening effects on investment and consumer sentiment.
Here’s the GCC countries’ outlook:
Saudi Arabia: the largest GCC economy is projected to continue on its recovery path, rising to 2.8% in 2025 and averaging robust growth of 4.6% in 2026-2027 after declining to 1.3% in 2023. Saudi Arabia is expected to post a healthy hydrocarbon GDP growth of 6.7% in 2026 and 6.1% in 2027, thanks to the phasing out of OPEC+ voluntary production cuts. Meanwhile, the kingdom’s non-oil GDP is expected to continue growing at a steady 3.6% rate between 2025 and 2027 as it pursues the Vision 2030 economic diversification agenda.
United Arab Emirates: Economic growth is expected to maintain its upward trajectory to hit 4.6% in 2025 before stabilizing at 4.9% in 2026 and 2027. The UAE’s non-oil sectors are expected to remain a key growth engine (4.9% growth in 2025), thanks in large part to ongoing governance improvements, targeted public investment and expanding external partnerships. Meanwhile, normalization of oil production levels is expected to support this ascending trend. The UAE cut oil production multiple times in recent years, including a voluntary 144,000 bpd cut effective May 2023 and a further 163,000 bpd cut from January 1, 2024, to March 31, 2024.
Qatar: Economic growth is projected to decline slightly to 2.4% in 2025 from 2.6% in 2024, before accelerating to 6.5% in 2026-2027 thanks to the ongoing expansion of LNG capacity. Qatar is undertaking a major, multi-phase expansion of its North Field liquefaction plant to significantly increase its liquefied natural gas (LNG) production, aiming to boost capacity from its current 77 million tons per annum (mtpa) to 142 mtpa by 2030. The expansion, encompassing the North Field East (NFE) (first phase) and North Field South (NFS) projects, will add new trains to the existing facilities, with the final phase, North Field West (NFW), announced in February 2024, bringing the total to 142 mtpa. This expansion aims to provide a stable, low-cost supply of LNG to meet global demand, with significant portions expected to go to East Asian markets and Europe, a key transitional fuel for decarbonization
Meanwhile, Qatar is also expected to record strong non-hydrocarbon growth, particularly in services, tourism and education. Non-hydrocarbon growth is expected to be robust thanks to international investments and infrastructure upgrades.
Bahrain: Economic growth is predicted to stabilize at 3.5% in the current year after recording two years of decline. The improvement is driven by the completion of BAPCO refinery upgrades coupled with robust non-hydrocarbon growth supported by Bahrain’s Economic Vision 2030. BAPCO refinery upgrades are part of the major Bapco Modernization Program (BMP) in Bahrain, which aims to increase refining capacity by 42% from 267,000 to 380,000 barrels per day (bpd) by upgrading the existing Sitra refinery. Key aspects of the BMP include improving energy efficiency, expanding the product slate by processing heavier crude components into high-value distillates, and meeting stringent environmental standards. The program involves introducing new high-conversion units, such as Resid Hydrocracking and VGO Hydrocracking units, and updating existing infrastructure and utilities. The BMP is considered Bahrain’s largest energy investment and a significant step to enhance the competitiveness and efficiency of its refining operations.
Kuwait: Economic growth is expected to rebound to 2.2% in 2025, after contracting -2.9% in 2024 and -3.6% in 2023, mainly driven by the phase out of OPEC+ production caps and the expansion of non-hydrocarbon sectors supported by large infrastructure projects and credit growth. Kuwait’s economic growth is expected to remain stable at 2.7% over 2026-2027, with the long-term economic outlook pegged to the successful implementation of diversification and structural reforms.
Oman: Growth is expected to accelerate to 3% in 2025, 3.7% in 2026, and 4% in 2027 after expanding only 1.7% in 2024. The growth will be driven by a rebound in oil production, with oil GDP growth of 2.1% in 2025, along with solid non-hydrocarbon growth (3.4%) driven by robust growth in manufacturing, construction, and services. This growth aligns with the final year of the sultanate’s Tenth Five-Year Plan, which aims for diversification and fiscal stability through measures like non-oil revenue generation. However, global economic uncertainties and oil price volatility remain potential risks, according to the IMF.
