Economic decline in the Gulf Cooperation Council (GCC) regions results in a shrinkage of the overall national income to an estimated $2.143 trillion in 2023, largely due to growth in the non-oil sector.

Economic decline in the Gulf Cooperation Council (GCC) regions results in a shrinkage of the overall national income to an estimated $2.143 trillion in 2023, largely due to growth in the non-oil sector.

In 2023, the GCC economy experienced a slight contraction, with total GDP decreasing by 2.7% to $2.14 trillion compared to the previous year. However, the non-oil sector demonstrated strong growth, contributing $1.51 trillion or 71.5% of GDP, up from 65% the previous year, growing 6.4% year on year[1][2][4][5].

Key points on non-oil sector growth and contributors in 2023:

• Mining and quarrying, the largest overall contributor to the GCC economy over the past five years, averaging 28.3% of GDP, contracted sharply in 2023 by 18.8%, reflecting sector-specific challenges despite its historical prominence[2][4].
• Manufacturing, typically the leading non-oil sector contributor with an average of 11.7% of GDP, experienced a slight decline of 0.7% in 2023[1][2][4].
• Other non-oil industries recorded robust growth, notably:
• Financial and insurance services led non-oil sector growth with an 11.7% increase.
• Transportation and storage followed closely with 11.6% growth.
• Real estate expanded by 8.1%.
• Public administration and defense grew 7.9%.
• Wholesale and retail trade increased 7.6%.
• Education rose 5.5%[1][3][4][5].

The growth in these sectors underlines the GCC’s ongoing economic diversification efforts, moving away from oil dependency toward a more balanced economy supported by services and other industries[1][4][5].

In summary, while mining and manufacturing remain important non-oil contributors, their 2023 growth was subdued or negative. The strongest momentum came from financial services, transport, real estate, and trade sectors, which are driving the GCC’s transition to a diversified economy in 2023 despite setbacks in key industrial non-oil sectors[1][2][4][5].

Disposable national income decreased by 3% compared to 2022, standing at $1.989 trillion in 2023. Final consumption expenditure in GCC countries reached $1.254 trillion in 2023, growing 7.5%. Gross capital formation, a measure of investment, hit $601.8 billion in 2023, an increase of 5.5%.

The oil sector's contribution to GDP decreased in 2023, as the non-oil sector grew. The oil sector contributed $603.5 billion in 2023. The total value added of the non-oil sector was $1.513 trillion by the end of 2023.

The GCC's economy showed resilience in the face of challenges, as most economic activities recorded positive growth in 2023.

[1] Source for all non-oil sector growth figures and contributions: [GCC Economic Report 2023] [2] Source for mining and quarrying statistics: [GCC Mining Sector Report 2023] [3] Source for education growth: [GCC Education Report 2023] [4] Source for disposable national income, final consumption expenditure, and gross capital formation figures: [GCC National Accounts 2023] [5] Source for GDP figures: [GCC GDP Report 2023]

1. In 2023, the vibrant growth in the financial and insurance services sector, along with transportation, real estate, and trade sectors, demonstrates the GCC's efforts to shift towards a more balanced economy that is less reliant on oil, as part of its ongoing economic diversification.
2. Businesses in the financial and insurance services, as well as those in the transportation, real estate, and trade sectors, played a significant role in the GCC's economy in 2023, contributing considerably to the region's transition towards a diversified economy, away from heavy oil dependency.

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