Unpacking GCC Risks: Insights from the Global Risks Report 2025

By Waheed AlFazari LinkedIn Top Voice | Strategy & Sustainability Leader

January 20, 2025

The World Economic Forum ’s Global Risks Report 2025 marks its 20th edition with heightened urgency. While the Gulf Cooperation Council (#GCC) nations continue to share common challenges, the 2025 report introduces significant shifts from 2024, reflecting an evolving risk landscape. Let’s examine the top concerns for the GCC in light of this year’s report, how they compare globally, and actionable insights for the region.

Read the full report here

Key Risk Themes in the GCC

1. Economic Fragility The concerns over an economic downturn persist across the region, particularly in Oman and Kuwait. However, a notable update from 2024 is the emphasis on geoeconomic confrontations, reflecting broader global tensions affecting regional trade and investment. This highlights the interplay between local economic vulnerabilities and global macroeconomic challenges.
2. Labour Market Pressures Labour shortages and mismatched skills remain critical issues in Bahrain, Oman, and Qatar. The 2025 report identifies these as interlinked with technological disruption—a risk elevated this year due to advancements in artificial intelligence (AI) and digital inequality.
3. Inflation Concerns Evolve While inflation remains a concern, it has slightly receded in the short-term risk rankings. This contrasts with 2024’s acute focus on cost-of-living pressures, indicating some stabilization in global commodity prices.
4. Technology Risks Intensify?Qatar and the UAE highlighted a major shift in 2025: a heightened focus on?adverse outcomes of AI technologies. This reflects a growing awareness of the disruptive potential of generative AI, especially in a rapidly digitizing region.
5. Geopolitical and Social Stability State-based armed conflict and societal polarization have climbed in the global rankings, influencing regional stability concerns. For GCC nations like Saudi Arabia, terrorism and misinformation remain top priorities. The interconnection between societal risks and digital transformation is a recurring theme.
6. Environmental Urgency Environmental risks have surged in prominence, with extreme weather events and biodiversity loss dominating long-term concerns. Compared to 2024, the 2025 report shows a growing consensus on the immediate and severe impacts of environmental degradation, directly relevant to the GCC’s water and climate resilience efforts.

GCC Risks in Global Context: Governmental and Private Sector Levels

Governmental Level

• Global Context: Governments worldwide are grappling with the dual challenges of geopolitical tensions and climate emergencies. Globally, risks like state-based armed conflicts and geoeconomic confrontations are at the forefront, creating hurdles for international cooperation.
• GCC Focus: For GCC governments, economic diversification and political stability are prioritized to reduce vulnerabilities from oil dependency and global trade dynamics. While the rest of the world focuses heavily on mitigating geopolitical threats, GCC countries place equal emphasis on labor market reforms and regional stability.

Private Sector Level

• Global Context: In the private sector, concerns globally focus on technological risks (AI disruption, cyber espionage) and supply chain vulnerabilities. Companies face mounting pressure to adapt to a rapidly digitizing and decarbonizing economy.
• GCC Focus: The GCC private sector mirrors some of these concerns, with added emphasis on talent acquisition and localization goals (e.g., Omanization, Saudization). The rising prominence of digital inequality in the GCC also diverges from global priorities, underscoring regional efforts to align with Vision 2040 and Vision 2030 strategies.

This comparative lens highlights that while global risks dominate the narrative, the GCC is uniquely positioned to address regional challenges by leveraging economic diversification, innovation, and coordinated governance strategies.

Comparing the 19th and 20th Editions

• Technology as a Double-Edged Sword: In 2024, technology risks centred around digital inequality. The 2025 report broadens this lens, emphasizing the risks of unchecked AI advancements, such as misinformation and job displacement.
• Geoeconomic Shifts: While the 2024 report flagged economic uncertainty, the 2025 edition underscores the destabilizing effects of tariff wars and trade decoupling, with implications for GCC’s economic diversification goals.
• Environmental Realities: The rising urgency of environmental risks is consistent but sharper in the 2025 report. GCC nations must accelerate their adaptation strategies to align with these evolving realities.

Glossary of Key Terms

1. Economic Downturn: A period of declining economic activity marked by reduced GDP, rising unemployment, and slowing business investments, often leading to a recession.
2. Labour Shortages: A mismatch in the availability of workers for specific roles, exacerbated by skill gaps, demographic shifts, and technological changes.
3. Digital Inequality: Disparities in access to digital tools, internet connectivity, and technological literacy, creating gaps in participation in the digital economy.
4. Societal Polarization: Deepening divisions within societies, driven by political, economic, or cultural differences, often exacerbated by misinformation and disinformation.

Opportunities for Resilience

The recurring themes across both editions—economic diversification, workforce transformation, and climate resilience—underscore the need for regional collaboration. GCC countries can leverage shared goals to collectively mitigate risks through:

• Joint climate action frameworks to address extreme weather and biodiversity challenges.
• Cross-border strategies for technology governance, including AI ethics and cybersecurity.
• Coordinated economic policies to navigate global geoeconomic tensions.

The Global Risks Report 2025 is a wake-up call for policymakers, businesses, and communities alike. By aligning their strategies, GCC nations can transform shared vulnerabilities into opportunities for collective strength and resilience.

What’s your take on the GCC’s approach to risk management in this dynamic landscape? Let’s engage in a dialogue on the steps we can take to ensure a more sustainable and secure future.