Feb 2025
According to Alpen Capital, CHE in the GCC is expected to grow from an estimated US$ 109.1 billion in 2024 to US$ 159 billion in 2029, at a CAGR of 7.8%. The region’s expanding population base, high incidence of NCDs, rising cost of treatment and medical inflation, coupled with increasing penetration of health insurance are expected to drive growth.
CHE as a proportion of GDP in the GCC is anticipated to grow from 5.0% in 2024 to 5.7% in 2029.
The growth varies widely among the GCC nations largely owing to country-specific population projections, economic conditions and cost of healthcare among other factors. Saudi Arabia is likely to witness the highest growth rate at 8.8%, whereas the UAE’s healthcare industry is expected to grow at a CAGR of 6.7% during the forecast period. . The market rankings are expected to remain unchanged, with Saudi Arabia and the UAE dominating the region’s CHE with a combined share of 82.6% by 2029. CHE of Qatar, Kuwait, Bahrain and Oman is expected to grow at CAGRs of 8.3%, 6.3%, 6.0% and 4.0%, respectively between 2024-2029.
The report forecasts that the region is likely to require 12,317 new hospital beds between 2024 and 2029. This translates into an estimated annual average growth of 1.9% since 2024 to reach a collective bed capacity of 140,572. Majority of the new additions are expected to be driven by the private sector as the GCC governments have started focusing on privatization to reduce cost burden and increase standard of care. Saudi Arabia is likely to witness the highest demand for beds in the GCC at over 8,500 new beds, accounting for 69.0% of the region’s total additions during the forecast period.
The report highlights that economic growth, coupled with the governments’ focus on economic diversification, is expected to drive healthcare investments in infrastructure and human capital development. Key demographic trends – such as population growth, increasing life expectancy at birth, and improvements in infant mortality rate– are shaping the regions’ healthcare demand. Notably, the proportion of population over 50 years is projected to increase from 12.7% in 2024 to 13.8% in 2029, further intensifying the demand for specialized healthcare services. Additionally, the expansion of health insurance coverage and the rise in medical tourism are expected to boost the utilization of private hospitals and healthcare services.
Despite these strong growth drivers, the GCC’s healthcare sector faces several challenges. The industry remains highly reliant on foreign healthcare professionals across specialties. There also remains a gap in supply of specialized care units in the tertiary care segment, contributing to rising outbound medical tourism. Moreover, the cost of healthcare services continues to rise due to high prevalence of non-communicable diseases (NCDs), increasing demand for advanced treatments, dependence on imported medical supplies, and a shortage of specialized treatment centers.
In response, the GCC governments are actively promoting privatization through public-private partnership (PPP) models to increase quality and efficiency of care. Significant investments in digital transformation aim to integrate innovative technologies for better healthcare outcomes. Another key trend, precision medicine and genomics are gaining traction with a goal of developing targeted treatments and therapies. Additionally, the rising demand for specialized and complex treatments is accelerating the establishment of Centers of Excellence (CoEs), long-term post-acute care (LTPAC) facilities and home healthcare services.
As the sector continues to mature, PPPs are expected to bring about a shift in care delivery that will be pivotal in shaping the industry's landscape. With the GCC healthcare ecosystem becoming more digital and patient-centric, health-tech innovations present significant prospects for growth. Going forward, industry players are likely to focus on value-driven investments, with larger operators targeting smaller providers and tech-enabled healthcare firms to expand their service offerings.
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