Alpen Capital’s latest report on the GCC healthcare industry projects significant growth in the sector, with Current Healthcare Expenditure (CHE) expected to reach US$ 159 billion by 2029, reflecting a 7.8% compound annual growth rate (CAGR). The report estimates that CHE in individual GCC countries will grow at rates ranging between 4.0% and 8.8% annually during this period.

The UAE-based investment banking advisory firm Alpen Capital launched the report through a webinar, followed by a panel discussion featuring key industry leaders, including Dr. Raza Siddiqui, Group CEO of Arabian Healthcare Group; Dr. Mohaymen Abdelghany, CEO of Fakeeh University Hospital; and Olivier Tricou, Managing Director at Alpen Capital. The discussion, moderated by Hameed Noor Mohamed, Managing Director at Alpen Capital, provided insights into the latest industry trends, challenges, and opportunities for investors and operators.

Growth Drivers and Market Trends

“The GCC healthcare industry is set for substantial growth due to macroeconomic factors, a growing and aging population, and expanding mandatory health insurance coverage,” said Sameena Ahmad, Managing Director at Alpen Capital. She highlighted that government-driven economic diversification and infrastructure development will elevate healthcare standards to international levels. The sector's growth will also be propelled by privatization initiatives, digital transformation investments, and rising demand for specialized healthcare services, creating innovative opportunities for investors and healthcare providers.

Olivier Tricou, Managing Director at Alpen Capital, emphasized that the industry is undergoing a transformation driven by demand for specialized medical centers and medical tourism. “Private sector players are investing significantly in expanding healthcare services to meet diverse population needs. Digitalization and artificial intelligence are revolutionizing diagnostics, patient care, and operational efficiency,” he added. The increasing number of specialized clinics catering to complex medical conditions is a key trend, alongside a dynamic mergers and acquisitions (M&A) landscape as healthcare operators aim to scale and innovate.

Key Projections and Country-Specific Growth Rates

According to Alpen Capital’s forecast, CHE in the GCC is expected to increase from US$ 109.1 billion in 2024 to US$ 159 billion in 2029, with CHE as a percentage of GDP rising from 5.0% to 5.7% during the period. The growth outlook varies by country due to differences in population trends, economic conditions, and healthcare costs:

• Saudi Arabia is projected to see the highest CAGR at 8.8%, maintaining its position as the largest healthcare market in the region.
• The UAE’s healthcare sector is expected to grow at a 6.7% CAGR.
• Qatar, Kuwait, Bahrain, and Oman are set to witness CAGRs of 8.3%, 6.3%, 6.0%, and 4.0%, respectively.

By 2029, Saudi Arabia and the UAE will continue to dominate the region’s CHE, accounting for a combined 82.6% share.

Expanding Healthcare Infrastructure

The report highlights that the GCC will require 12,317 additional hospital beds by 2029, translating to an annual average growth of 1.9%. This will bring the region’s total bed capacity to 140,572 beds. The private sector is expected to drive most of the new capacity, as governments increasingly focus on public-private partnerships (PPPs) and privatization to manage costs and improve care standards. Saudi Arabia will see the highest demand, requiring over 8,500 new beds, which will account for 69.0% of total new additions.

Key Industry Challenges and Responses

Despite strong growth prospects, the GCC healthcare industry faces several challenges:

• Heavy reliance on foreign healthcare professionals, particularly in specialized fields.
• Shortage of tertiary care centers, contributing to high rates of outbound medical tourism.
• Rising healthcare costs, driven by the increasing prevalence of non-communicable diseases (NCDs), demand for advanced treatments, reliance on imported medical supplies, and a lack of specialized treatment facilities.

To address these challenges, GCC governments are actively promoting PPPs to enhance healthcare quality and efficiency. Significant investments in digital transformation are being made to integrate cutting-edge technologies for better patient outcomes. Additionally, precision medicine and genomics are gaining traction as part of efforts to develop targeted treatments.

Future of Healthcare in the GCC

The report forecasts a shift in care delivery models, with a strong focus on Centers of Excellence (CoEs), long-term post-acute care (LTPAC) facilities, and home healthcare services. Increasing insurance penetration and the expansion of medical tourism will further drive the utilization of private healthcare services.

As the industry matures, public-private collaborations and technology adoption will be critical to its evolution. Digital and tech-enabled healthcare firms are expected to play a major role in driving value-based investments. Larger healthcare operators will likely target smaller providers and health-tech firms to expand service offerings and maintain a competitive edge.

With healthcare in the GCC becoming more patient-centric and digitally advanced, the sector presents lucrative opportunities for investors, operators, and technology providers looking to capitalize on the region’s rapidly evolving healthcare landscape.