GCC Healthcare Industry Report

February 2016

Development of the healthcare sector has taken a center stage in the GCC countries, as they witness an era of demographic transition accompanied by rising prevalence of lifestyle-related diseases. In order to ease the growing pressure on the healthcare system, the GCC governments are injecting huge funds as well as encouraging private sector participation to build hospitals and clinics, upgrade the existing infrastructure, and match the quality of services offered in developed countries. They are also investing heavily in technological advancements as well as rolling out mandatory health insurance schemes in all the countries to further accelerate the growth of the healthcare sector.

The GCC governments’ emphasis on the development of the healthcare sector has resulted in several investment opportunities for the private sector. Over the last year, we have seen a steady flow of private equity funds into the sector and the region has witnessed several successful M&A transactions. The GCC governments’ budgets are increasingly coming under pressure amid falling oil prices thereby opening up investment arenas for regional and international private sector players to make their entry into the healthcare market. We see this trend strengthening as governments and private companies work with each other to benefit from the opportunities presented by the GCC healthcare sector.

The GCC Healthcare Industry Outlook

According to Alpen Capital, the GCC healthcare market is projected to grow at a 12.1% CAGR from an estimated US$ 40.3 billion in 2015 to US$ 71.3 billion in 2020.An increase in the population and rising cost of treatment are the primary factors aiding this growth.

From an estimated US$ 24.0 billion in 2015, the outpatient market is forecasted to reach US$ 42.4 billion in 2020. The inpatient market is anticipated to grow from US$ 16.4 billion to US$ 28.9 billion during the same period.

The healthcare market in each GCC country is anticipated to expand by 11%-13% between 2015 and 2020 in terms of annual average growth rates.

The demand for number of hospital beds in the GCC region is projected to grow at a 2.3% CAGR from an estimated 101,797 beds in 2015 to 113,925 beds in 2020.

The Saudi Arabian healthcare market is forecasted to reach US$ 27.4 billion in 2020, registering a CAGR of 11.0% from 2015.The healthcare market in the UAE is projected at US$ 19.5 billion in 2020, indicating an annual average growth of 12.7% from 2015.

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