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Current Healthcare Expenditure (CHE) in the GCC will reach $159bn by 2029, according to forecasts by Alpen Capital.
It implies an annualised growth rate of 7.8 per cent and CHE in the GCC is anticipated to increase at growth rates ranging from 4 per cent to 8.8 per cent.
UAE-based investment banking advisory firm, Alpen Capital, launched its latest GCC Healthcare Industry report which features forecasts on the sector, recent analysis on trends, growth drivers and challenges facing the segment.
Sameena Ahmad, Managing Director of Alpen Capital, said: “The GCC healthcare industry is poised for strong growth driven by macro-economic factors, a growing and ageing population, and the expansion of mandatory health insurance.
“Government-led diversification strategies and national development plans of the GCC will continue to enhance the healthcare infrastructure and facilities, bringing them at par with international standards.
“Further growth of the healthcare industry will be fuelled by privatisation initiatives, substantial investments in digital transformation and rising demand for specialised healthcare services.
Olivier Tricou, Managing Director, Alpen Capital, said: “The GCC healthcare industry is experiencing significant transformation, driven by a growing demand for specialized medical centres and increasing medical tourism.
“In response, private sector players are investing heavily to expand healthcare services and meet the needs of a diverse population. Key trends shaping the industry include the rapid adoption of artificial intelligence and digitalisation, which are enhancing diagnostics, patient care, and operational efficiency.
“This ongoing transformation is expected to drive a dynamic M&A landscape, as operators seek to scale, innovate, and align with the region’s evolving healthcare demands”.
According to Alpen Capital, CHE in the GCC is expected to grow from an estimated $109.1bn in 2024 to $159bn in 2029, at a CAGR of 7.8 per cent.
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 per cent in 2024 to 5.7 per cent 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 per cent, whereas the UAE’s healthcare industry is expected to grow at a CAGR of 6.7 per cent 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 per cent by 2029.
CHE of Qatar, Kuwait, Bahrain and Oman is expected to grow at CAGRs of 8.3 per cent, 6.3 per cent, 6 per cent and 4 per cent, 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 per cent 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 per cent 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 per cent in 2024 to 13.8 per cent in 2029, further intensifying the demand for specialised healthcare services.
Additionally, the expansion of health insurance coverage and the rise in medical tourism are expected to boost the utilisation 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 specialised 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 specialised treatment centres.
In response, the GCC governments are actively promoting privatisation 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 specialised and complex treatments is accelerating the establishment of Centres 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.
