Rising demand, technological advancements and government initiatives drive sector growth
Dubai – February 19th, 2025: Alpen Capital’s latest healthcare industry report for the GCC forecasts the Current Healthcare Expenditure (CHE) in the region to reach US$ 159 billion by 2029, implying an annualized growth rate of 7.8%. During the forecast period, CHE in the GCC countries is anticipated to increase at growth rates ranging from 4.0% to 8.8%
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. It also profiles some of the key healthcare companies in the region.
The report was launched over a webinar followed by a panel discussion featuring Dr. Raza Siddiqui, Group CEO, Arabian Healthcare Group & Executive Director, RAK Hospitals; Dr. Mohaymen Abdelghany, Chief Executive Officer, Fakeeh University Hospital and Olivier Tricou, Managing Director, Alpen Capital. Hameed Noor Mohamed, Managing Director, Alpen Capital moderated the discussion
“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 fueled by privatization initiatives, substantial investments in digital transformation and rising demand for specialized healthcare services. Looking ahead, we expect the sector to offer innovative opportunities for investors and operators to expand their presence and deliver advanced, high quality healthcare services”, says Sameena Ahmad, Managing Director, Alpen Capital (ME) Limited.
Olivier Tricou, Managing Director, Alpen Capital (ME) Limited.
“The GCC healthcare industry is experiencing significant transformation, driven by a growing demand for specialized medical centers 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 digitalization, which are enhancing diagnostics, patient care, and operational efficiency. Additionally, there is a notable increase in specialized clinics to address complex medical conditions and cater to specific patient demographics. To remain competitive, healthcare organizations are developing strategic plans that leverage technology and multi-specialty services. 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”,says Olivier Tricou, Managing Director, Alpen Capital (ME) Limited.
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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About Alpen Capital: Alpen Capital (ME) Limited is incorporated as a limited liability company in the Dubai International Financial Centre, Dubai, United Arab Emirates and is licensed by the Dubai Financial Services Authority. Alpen Capital offers a full range of investment banking advisory services in the areas of M & A, Debt, Equity and Capital Markets to some of the largest business conglomerates and financial institutions in the GCC and South Asia. It has offices in Abu Dhabi, Dubai, Doha, Muscat and New Delhi.
About Alpen Asset Advisors: Alpen Asset Advisors Limited, is an independent wealth management firm offering private banking and asset management services. It offers a comprehensive offering covering all asset classes, investment themes & styles and sectors. With our open architecture platform we identify investment opportunities and design an investment program to achieve the wealth creation within the given risk appetite.