By Dr Renée Friedman, Global Head of Research, EXANTE
For over a decade, the Gulf Cooperation Council (GCC) has been framed as a region “in transition.” That framing no longer captures the scale or speed of change underway. In 2025, the Middle East is not simply adjusting to global shifts — it is increasingly shaping them.
Our latest EXANTE report, From the Abraham Accords to AI to FTAs: How to Trade the New Middle East, explores this transformation in depth. While no report can predict outcomes or guarantee returns, the data suggests the GCC is becoming a more influential player in global markets, with structural shifts that could reshape long-term economic dynamics.
AI Investment Is Reshaping the Region’s Economic Trajectory
Around the world, AI has become a defining feature of modernisation. Yet the GCC is approaching this wave differently — and faster — than many developed markets. The UAE and Saudi Arabia are deploying significant capital to build cloud-native digital infrastructure, AI research hubs, and high-capacity data centres.
None of this ensures economic success, but by engaging in this technological leap-frogging, it almost automatically ensures greater productivity.. The region’s ability to modernise without the burden of legacy infrastructure is likely to offer more advantages as AI adoption accelerates worldwide.
A More Connected Trade Landscape
In a period marked by tariff uncertainty, the GCC’s expanding trade network is notable. The UAE alone has finalised more than 25 Comprehensive Economic Partnership Agreements, linking the region to Asia, Africa, Europe and beyond.
These agreements do not eliminate risk — global trade remains vulnerable to political and economic shocks — but they do diversify external relationships and broaden the Gulf’s access to markets in services, digital commerce, and advanced manufacturing.
For policymakers and businesses, this suggests a gradual shift toward a more interconnected economic framework. For investors, it may offer context for understanding how regional and international flows are evolving.
The Abraham Accords Continue to Influence Regional Dynamics
Five years after the Abraham Accords began reshaping diplomacy between the UAE and Israel, economic cooperation has continued, particularly in technology, logistics, and innovation.
This does not insulate the region from geopolitical pressures — tensions remain, and policy environments can change — but the durability of commercial links to date suggests that, for now, the Accords have created channels for collaboration that extend beyond symbolism.
Energy Transition: A Strategic, Not Immediate, Transformation
Oil will remain significant to the region’s economies for some time, yet the long-term strategic direction is shifting. GCC states are investing heavily in renewable energy, green hydrogen, carbon-capture technologies and critical minerals.
These investments are not guarantees of future dominance in these new energy markets, but they demonstrate a recognition that global decarbonisation initiatives are continuing and expanding due to a wide array of international agreements, national priorities, and private sector commitments. For the Gulf, the energy transition is increasingly viewed as a catalyst for diversification rather than a threat to stability.
A Multi-Aligned Geopolitical Strategy
The GCC’s foreign policy posture in 2025 reflects a multipolar world. Rather than aligning exclusively with any single power bloc, Gulf states are actively working to maintain constructive ties with the US, China, the European Union, and emerging Asian economies.
This approach does not eliminate geopolitical risk, but it can offer flexibility. In a fragmented global environment, the ability to engage multiple partners on trade, technology, and security may help support resilience.
A Region Undergoing Structural Change
The goal of our new report is not to forecast outcomes or point to specific investment results — all markets involve uncertainty, and past trends are not necessarily indicative of future developments.
Rather, the findings highlight a region undergoing a structural and regulatory evolution, with:
-
expanding digital capacity,
-
a growing network of trade agreements,
-
new cross-border economic corridors, and
-
policy frameworks aimed at reducing historic dependence on hydrocarbons.
For investors, policymakers and market participants, understanding these shifts is essential to evaluating how the Middle East fits into the changing global economic landscape.
The GCC’s transformation is still unfolding. But if 2025 makes anything clear, it is that the region is playing a more active role in shaping global economic and technological trends than at any point in its modern history.
About Renée
Dr Renée Friedman is Global Head of Research at EXANTE, where she leads analysis on geopolitics, macroeconomics, and private capital trends. A former Managing Editor at the Economist Intelligence Unit and fund manager in the City of London, she has advised institutions from the UK Parliament to the UNDP. She holds a PhD in Economics from London Business School.
Subscribe to her team’s research here: exante.eu/subscription
EXANTE’s full report, From the Abraham Accords to AI to FTAs: How to Trade the New Middle East, is available for download here.
By Dr Renée Friedman, Global Head of Research, EXANTE
For over a decade, the Gulf Cooperation Council (GCC) has been framed as a region “in transition.” That framing no longer captures the scale or speed of change underway. In 2025, the Middle East is not simply adjusting to global shifts — it is increasingly shaping them.
Our latest EXANTE report, From the Abraham Accords to AI to FTAs: How to Trade the New Middle East, explores this transformation in depth. While no report can predict outcomes or guarantee returns, the data suggests the GCC is becoming a more influential player in global markets, with structural shifts that could reshape long-term economic dynamics.
AI Investment Is Reshaping the Region’s Economic Trajectory
Around the world, AI has become a defining feature of modernisation. Yet the GCC is approaching this wave differently — and faster — than many developed markets. The UAE and Saudi Arabia are deploying significant capital to build cloud-native digital infrastructure, AI research hubs, and high-capacity data centres.
None of this ensures economic success, but by engaging in this technological leap-frogging, it almost automatically ensures greater productivity.. The region’s ability to modernise without the burden of legacy infrastructure is likely to offer more advantages as AI adoption accelerates worldwide.
A More Connected Trade Landscape
In a period marked by tariff uncertainty, the GCC’s expanding trade network is notable. The UAE alone has finalised more than 25 Comprehensive Economic Partnership Agreements, linking the region to Asia, Africa, Europe and beyond.
These agreements do not eliminate risk — global trade remains vulnerable to political and economic shocks — but they do diversify external relationships and broaden the Gulf’s access to markets in services, digital commerce, and advanced manufacturing.
For policymakers and businesses, this suggests a gradual shift toward a more interconnected economic framework. For investors, it may offer context for understanding how regional and international flows are evolving.
The Abraham Accords Continue to Influence Regional Dynamics
Five years after the Abraham Accords began reshaping diplomacy between the UAE and Israel, economic cooperation has continued, particularly in technology, logistics, and innovation.
This does not insulate the region from geopolitical pressures — tensions remain, and policy environments can change — but the durability of commercial links to date suggests that, for now, the Accords have created channels for collaboration that extend beyond symbolism.
Energy Transition: A Strategic, Not Immediate, Transformation
Oil will remain significant to the region’s economies for some time, yet the long-term strategic direction is shifting. GCC states are investing heavily in renewable energy, green hydrogen, carbon-capture technologies and critical minerals.
These investments are not guarantees of future dominance in these new energy markets, but they demonstrate a recognition that global decarbonisation initiatives are continuing and expanding due to a wide array of international agreements, national priorities, and private sector commitments. For the Gulf, the energy transition is increasingly viewed as a catalyst for diversification rather than a threat to stability.
A Multi-Aligned Geopolitical Strategy
The GCC’s foreign policy posture in 2025 reflects a multipolar world. Rather than aligning exclusively with any single power bloc, Gulf states are actively working to maintain constructive ties with the US, China, the European Union, and emerging Asian economies.
This approach does not eliminate geopolitical risk, but it can offer flexibility. In a fragmented global environment, the ability to engage multiple partners on trade, technology, and security may help support resilience.
A Region Undergoing Structural Change
The goal of our new report is not to forecast outcomes or point to specific investment results — all markets involve uncertainty, and past trends are not necessarily indicative of future developments.
Rather, the findings highlight a region undergoing a structural and regulatory evolution, with:
-
expanding digital capacity,
-
a growing network of trade agreements,
-
new cross-border economic corridors, and
-
policy frameworks aimed at reducing historic dependence on hydrocarbons.
For investors, policymakers and market participants, understanding these shifts is essential to evaluating how the Middle East fits into the changing global economic landscape.
The GCC’s transformation is still unfolding. But if 2025 makes anything clear, it is that the region is playing a more active role in shaping global economic and technological trends than at any point in its modern history.
About Renée
Dr Renée Friedman is Global Head of Research at EXANTE, where she leads analysis on geopolitics, macroeconomics, and private capital trends. A former Managing Editor at the Economist Intelligence Unit and fund manager in the City of London, she has advised institutions from the UK Parliament to the UNDP. She holds a PhD in Economics from London Business School.
Subscribe to her team’s research here: exante.eu/subscription
EXANTE’s full report, From the Abraham Accords to AI to FTAs: How to Trade the New Middle East, is available for download here.
