The GCC is no longer just a provider of capital, it is also a major recipient of foreign investment flows
With more than USD 3,000 billion in external public assets (130% of the region’s GDP excluding foreign-exchange reserves), the GCC has considerable financial clout to continue positioning itself in strategic sectors. Gulf sovereign wealth funds, in particular, accounted for 43% of total global sovereign-wealth-fund spending in 2025, making them key players in areas such as artificial intelligence.
In addition, the role of Gulf countries in the global financial architecture is shifting, as the GCC is becoming a significant beneficiary of foreign investment. Inward capital flows have risen sharply since 2023, reaching 9.6% of regional GDP in 2025, up from 5.7% two years earlier, taking them to the highest rate among emerging regions.
Saudi Arabia and the United Arab Emirates: divergent dynamics
Saudi Arabia and the United Arab Emirates (UAE) together account for 85% of these flows, but the composition differs. In the UAE, foreign direct investment (FDI) account for 73% of net non-resident capital inflows since 2024. In Saudi Arabia, more than half are portfolio investments. In fact, the UAE is primarily seeking to attract foreign expertise by offering a competitive business climate, whereas Saudi Arabia faces a growing financing need in order to support its massive infrastructure programme. The current-account balance turned negative in 2024, with a deficit currently around 3% of GDP. As a result, Saudi Arabia is one of the few GCC members to record “twin deficits.” This has led to a surge in hard-currency bond issuance, standing at USD 90 billion in 2025, compared to USD 50 billion in 2024. The UAE’s activity on international financial markets remains strong as well; its banks, in particular, are issuing debt and attracting foreign lenders to reinforce its status as a financial hub.
Solid outlook
Strong macroeconomic fundamentals and growth prospects should continue to support the region's attractiveness to investors in 2026. Despite the downward trend in oil prices, the GCC will be able to maintain a high level of foreign commitments without having to draw on its financial assets. Although Saudi Arabia's situation appears more fragile, it is not raising major concerns given its moderate level of external debt and the ongoing diversification of its economy.
