The Middle East and North Africa region is expected to grow by 4.2% in 2025, marking a return to the low growth rates that prevailed before the global pandemic. However, this growth rate is expected to be lower than the predicted real GDP growth for advanced economies, emerging market economies, and developing economies.
The Gulf Cooperation Council countries are expected to see their economic growth rate rise to 2.8% in 2024 and 4.7% in 2025, with Bahrain’s economy growing by 3.5% in 2024 and 3.3% in 2025, Kuwait by 3.1% in 2025, and Saudi Arabia by 5.9% next year. On the other hand, Egypt’s economy is expected to grow by only 2.8% in 2024, while Algeria’s economy will grow by just 1%.
In contrast, the Palestinian economy is expected to contract by -6.5%, and the Syrian economy by -1.5%. The ongoing conflict in the Middle East has caused widespread destruction of infrastructure and displacement of people in the Gaza Strip, resulting in a humanitarian crisis with food and water security issues for almost all of its population living below poverty line and famine being imminent for at least one-fourth of them.
The conflict takes place amidst a global economy that has been suffering from slowing growth rates for three years due to post-pandemic recovery challenges like inflationary pressures and tightening interest rates globally. Emerging market economies are expected to grow slightly faster than developing economies over the next two years, but oil-exporting countries will experience similar growth rates as oil importers due to rising oil prices after Russia’s invasion of Ukraine in late November last year, which slowed global economic growth including those countries importing oil from this region.