Strategy&’s Productivity Potential Index could boost GCC GDP by $2.5 trillion

The massive Gulf Cooperation Council (GCC) region could see its Gross Domestic Product (GDP) increase by 1.6 percentage points over the next 10 years, from 3.8% to 5.4%, by utilising a productivity index, according to Strategy& Middle East, part of the PwC network.

The index has the potential to add more than $2.5 trillion to the GDP of GCC countries. The multinational consulting firm’s new way of measuring productivity includes dimensions such as environmental impact, health, innovation and the quality of institutions.

Traditional measures of productivity proving insufficient

The six GCC nations, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the UAE, can unlock their performance by leveraging the Productivity Potential Index (PPI) to identify the weakest determinant and subsequently lifting it to the level of best-in-class countries.

Dima Sayess, partner and Ideation Centre lead at Strategy&, said: “At a time when the world is looking to become more sustainable, it is essential to have appropriate tools for measuring economic progress that take into account criteria such as the environment.”

Traditional measures of productivity have not included important dimensions such as biodiversity loss, climate change and social change, in addition to ageing population and other 21st-century challenges. The new index is expected to fill the gap.

Close gaps and boost performance

The new system can also help countries easily get an idea of the strongest and weakest aspects of their economic performance, and keep a note of the elements that have the potential to become the biggest game changers for productivity and growth.

Moreover, the productivity index can also offer policymakers a practical view of how they can close gaps and boost performance. Chadi Moujaes, partner with Strategy&, hopes the research will help governments identify more accurately where they can make a difference.

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