The GCC’s Current Healthcare Expenditure (CHE) is projected to grow from $109.1 billion in 2024 to $159 billion by 2029, reflecting a compound annual growth rate (CAGR) of 7.8%, according to Alpen Capital. Growth rates across the region are expected to range from 4% to 8.8%.
Alpen Capital, a UAE-based investment banking advisory firm, has released its latest GCC Healthcare Industry report, highlighting sector forecasts, key trends, growth drivers, and challenges.
Key Growth Drivers
Sameena Ahmad, Managing Director at Alpen Capital, attributes the sector’s expansion to macroeconomic factors, a growing and aging population, and the expansion of mandatory health insurance. Government-led diversification strategies and national development plans are also enhancing healthcare infrastructure and aligning it with international standards. Additionally, privatisation efforts, digital transformation, and rising demand for specialised care are further driving growth.
Olivier Tricou, also a Managing Director at Alpen Capital, noted that the industry is undergoing rapid transformation, driven by increased demand for specialised medical centres and growing medical tourism. Private sector investments are expanding healthcare services, with key trends including the adoption of artificial intelligence (AI), digitalisation, and the rise of specialised clinics catering to complex medical needs. This evolution is also expected to drive mergers and acquisitions (M&A) as operators seek to scale and innovate.
Regional Growth Trends
CHE as a share of GDP in the GCC is expected to rise from 5% in 2024 to 5.7% by 2029. Saudi Arabia is projected to experience the highest growth rate at 8.8%, while the UAE is set to expand at a CAGR of 6.7%. By 2029, Saudi Arabia and the UAE are expected to maintain their dominance, collectively accounting for 82.6% of the region’s CHE. Other projected growth rates include Qatar (8.3%), Kuwait (6.3%), Bahrain (6%), and Oman (4%).
To meet rising healthcare demand, the GCC will require an additional 12,317 hospital beds by 2029, averaging 1.9% annual growth, bringing the total bed capacity to 140,572. Saudi Arabia will account for 69% of these new additions, with over 8,500 new beds. The private sector is expected to play a key role in these expansions as governments shift towards privatisation to enhance healthcare quality and reduce financial burdens.
Challenges and Future Prospects
Despite strong growth drivers, the GCC healthcare sector faces challenges, including reliance on foreign healthcare professionals, gaps in tertiary care, and rising outbound medical tourism. The increasing prevalence of non-communicable diseases (NCDs), high treatment costs, and dependence on imported medical supplies further contribute to rising healthcare expenses.
In response, governments are prioritising public-private partnerships (PPPs) to improve healthcare efficiency. Investments in digital transformation, precision medicine, and genomics are also gaining traction, with a focus on developing targeted therapies. The demand for complex treatments is driving the rise of Centres of Excellence (CoEs), long-term post-acute care (LTPAC) facilities, and home healthcare services.
As the sector continues to evolve, private investors and operators will find opportunities to expand their presence and deliver high-quality, innovative healthcare solutions across the GCC.
(Source: Arabian Business)
