A new report from PwC highlights three distinct data-driven scenarios for the Middle East in 2035, indicating a $232 billion opportunity if regional governments and businesses effectively leverage AI-driven productivity improvements and address the economic effects of climate change, according to a new research.
The research, Value in Motion: The Middle East’s time to lead is now, also indicates that over the next decade, industries will reorganize to meet human needs in innovative ways, culminating in the emergence of new ‘domains’ that transcend traditional sector boundaries. These transformations will generate avenues for businesses and organizations to reinvent themselves, target new client bases, forge cross-sector partnerships, and innovate their service and operational frameworks.
With ambitious climate commitments, access to the world’s least expensive renewable energy, and rapidly evolving AI capabilities and infrastructure, the Middle East possesses a unique strategic advantage and is well-positioned to spearhead the next wave of sustainable, technology-driven economic growth. PwC’s modeling reveals that under a business-as-usual scenario, regional real GDP could expand by 41.8 percent by 2035. However, when accounting for climate-related risks—such as heatwaves, water scarcity, and flooding—this growth diminishes by 13.9 percentage points to a net increase of 27.9 percent, placing GDP at $4.57 trillion. This serves as the foundation for evaluating three distinct future scenarios globally and their implications for the Middle East.
At stake is $232 billion—the disparity between the region’s most optimistic and constrained economic futures. In the most favorable scenario, widespread AI adoption could contribute an additional 8.3 percent through productivity gains; this, combined with decisive climate action, could elevate GDP to $4.68 trillion by 2035.
Balancing AI and energy costs
Stephen Anderson, chief strategy & technology officer at PwC Middle East, remarked: “The decade ahead will challenge the region’s imagination and capabilities like never before. As the dynamics of the ‘three tomorrows’ unfold, they will reshape the Middle East’s economy. To stay ahead, businesses and governments must act with pace, purpose and partnership—reimagining traditional models to unlock the competitive advantage the region is uniquely positioned to deliver.”
The research introduces a new framework structured around emerging ‘domains of growth’—such as how we move, fuel, build, care, compute, and connect. These cross-industry ecosystems signal the future of value creation, replacing traditional sector silos with more dynamic, interconnected opportunities.
The report also underscores the role of clean energy in powering AI infrastructure and scaling innovation. As global hyperscalers increase their investments, the Middle East’s renewable energy advantage could facilitate its emergence as a regional and global AI hub.
Dr. Yahya Anouti, partner at Strategy& and PwC Middle East Sustainability Platform leader, stated: “A critical factor will be how effectively the region balances the cost and scalability of AI with the availability and affordability of clean energy to power it—especially as AI adoption accelerates at an unprecedented pace. Striking this balance will be essential to unlocking the region’s full potential.”
Call for coordinated action
The report further calls on governments, business leaders, and academia to undertake bold, coordinated actions to shape the region’s future. It urges governments to redesign institutions around evolving human needs. This includes establishing ministries focused on care or mobility. Additionally, it calls for creating dedicated funds to fast-track AI adoption in public services. Business leaders are encouraged to reinvent operating models for a more localized, digital, and low-carbon economy while enhancing supply chain resilience and cross-sector partnerships. Meanwhile, academia must anchor national progress by developing future-fit talent. It should also advance applied research in strategic areas. Additionally, embedding entrepreneurship across the education system is essential, PwC noted.
With ambitious visions and world-leading capabilities, the region has the potential not only to adapt but to lead. The value is already in motion—now is the time to act, the report concluded.
