A recent report by Fitch Ratings praised the rapid steps taken by Saudi Arabia and the Gulf Cooperation Council (GCC) countries to reduce their dependence on oil, stressing that economic transformation plans have begun to bear tangible fruit on the ground.
A qualitative leap in the non-oil economy
Paul Gamble, Head of Sovereign Ratings for the Middle East and Africa at Fitch Ratings, affirmed that Saudi Arabia has made genuine and exceptional progress in its economic diversification efforts. In remarks to Al Arabiya Business, Gamble pointed to a crucial indicator reflecting the success of the Kingdom's Vision 2030 : the non-oil sector now accounts for more than half of the Kingdom's GDP. This historic transformation is a result of the profound structural reforms launched by Saudi Arabia since 2016, aimed at opening up new sectors such as tourism, entertainment, mining, and manufacturing, thereby reducing its historical dependence on the volatility of energy markets.
A positive outlook despite the challenges
Gamble explained that the growth story in the Gulf Cooperation Council (GCC) countries is generally positive, with the agency assigning a "stable" outlook to five out of the six GCC member states, particularly following the recent upgrade of Oman's credit rating. He predicted that the GCC countries would register positive economic growth in 2026, supported by strong momentum in the non-oil sectors and continued strategic government spending on infrastructure and major projects.
However, the Fitch official stressed that the sustainability of this growth remains contingent on these economies’ ability to strengthen their budgets’ resilience against external shocks and reduce their sensitivity to long-term oil price volatility.
Oil price forecasts and their financial impact
Regarding energy markets, Fitch offered a cautious outlook for 2026, with Gamble predicting an average Brent crude price of around $63 per barrel, attributing this to ample supply and relatively weak global demand. Financially, the report noted the varying impact of this price on the budgets of Gulf countries
- Surplus countries: The level of $63 is considered very suitable for Qatar, Kuwait, and the UAE, which qualifies them to record comfortable financial surpluses.
- Break-even point: For the Sultanate of Oman, this price will be close to the fiscal break-even price, requiring continued fiscal discipline.
The geopolitical context and its impact
The report did not overlook the challenges surrounding the region, with Gamble noting that geopolitical and political risks remain high in the Middle East. He emphasized that the uncertainty surrounding the sustainability of the current calm could keep these risks present for some time, requiring countries in the region to continue their fiscal precautionary policies and strengthen their foreign reserves to prepare for any potential emergencies.
This report reflects growing international confidence in the resilience of the Saudi and Gulf economies and their ability to adapt to global changes, supported by a strong political will to implement reforms, improve the business environment, and attract foreign investment.
