The GCC is keeping its shadow economies in check, with GDP impact 10% smaller than the global average, reveals Arthur D. Little Viewpoint

The GCC is keeping its shadow economies in check, with GDP impact 10% smaller than the global average, reveals Arthur D. Little Viewpoint

- Shadow activity impact: 15% of Saudi Arabia's GDP, 17% in Bahrain, 22% in Kuwait, 24% in UAE and Oman

- SMEs are key drivers of economic growth in the region with Saudi Arabia aiming to achieve 35% SME contributions and Bahrain targeting 50% SME contributions by 2030

Dubai, UAE: Arthur D. Little (ADL), the world’s first management consulting firm, today released an exclusive viewpoint report titled "Delivering Inclusive Growth." The report outlines recent initiatives and presents innovative strategies designed to further diminish the shadow economy and bolster small and medium-sized enterprises (SMEs) by enhancing economic and financial inclusion.

Gulf Cooperation Council (GCC) countries boast a remarkably small shadow economy, with informal businesses accounting for just 18% of GDP. It is estimated that shadow activity accounts for 15% of GDP in Saudi Arabia, 17% in Bahrain, 22% in Kuwait, and 24% in the UAE and Oman. This is significantly below the global average of approximately 28% and closely aligns with Organisation for Economic Co-operation and Development (OECD) countries, which stand at around 15%. Building on this strong position, integrating shadow businesses into the formal economy remains a top priority across the GCC.

Stephane Ulcakar, Principal at Arthur D. Little, Middle East said: "By integrating