The World Bank expected on Tuesday economic growth in GCC countries to increase to 3.2 percent in 2025, 4.5 percent in 2026, and 4.8 percent in 2027.
In the Middle East and North Africa region, growth is projected to strengthen to 2.7 percent in 2025 and average 3.9 percent in 2026-27, mainly due to an expansion of oil activity in oil exporters, which offsets the effects of weakening external demand and lower oil prices. Growth in oil importers is also expected to rise, reflecting an assumed stabilization of conflicts in the region and declining inflationary pressures.
According to its latest Global Economic Prospects report, the World Bank also cut its global growth forecast for 2025 by 0.4 percentage points to 2.3 percent, noting that the global economy is facing a “substantial headwind”, with increased trade tension and heightened policy uncertainty.
Stronger oil production, easing geopolitical tensions support region
Despite the rise in global trade tensions and heightened uncertainty, activity in the MENA region has strengthened, partly reflecting increased oil production and easing geopolitical tensions.
In oil exporters, oil activity is recovering following the April 2025 announcement of the phase-out of the voluntary oil production cuts by member countries of the Organization of the Petroleum Exporting Countries and other affiliated oil producers (OPEC+). Growth of nonoil activity in oil exporters has also been resilient, particularly in the manufacturing and services sectors.
The World Bank report also noted that the external position of the GCC region has remained resilient and the growth of non-oil merchandise and services exports, including transportation and tourism, has been robust, mitigating the impact of reduced oil production on current accounts.
Saudi economy to grow 2.8 percent this year
In Saudi Arabia, growth is set to increase to 2.8 percent this year, reflecting a gradual expansion of oil production. However, the forecast for 2025 has been downgraded by 0.6 percentage points, mainly because of expected lower oil prices and fiscal revenues leading to lower export proceeds, as well as heightened uncertainty curbing investment.
Meanwhile, the UAE’s growth is projected at 4.6 percent in 2025, and 4.9 percent in 2026 and 2027.
The World Bank expects inflation in GCC countries to remain contained. In contrast, it is expected to rise in non-GCC oil exporters, including Iran, where rising fiscal and currency pressures are forecast to translate into rising prices. In oil importers, inflation is anticipated to decline further, allowing central banks to lower interest rates in several of them, supporting activity.
Read: World Bank cuts global growth forecast to 2.3 percent for 2025 on increased trade tensions
Oil importers’ growth to pick up to 3.6 percent in 2025
In oil importers, growth is projected to rise to 3.6 percent in 2025, 3.9 percent in 2026, and 4.3 percent in 2027, mostly owing to strengthening private consumption as inflation softens, a recovery in agricultural output, and assumed moderation of geopolitical tensions.
For Egypt, growth is expected to inch up from 3.8 percent in FY2024/25 to 4.2 percent in FY2025/26 and 4.6 percent in FY2026/27, reflecting stronger private consumption, higher private investment and a gradual rebound in manufacturing activity.
In Lebanon, growth is projected to reach 4.7 percent this year, reflecting a rebound in tourism, a recovery in private sector activity, and a gradual increase in capital inflows, assuming the truce holds.
