Insha'Allah: Positive Economic Outlook for Middle East and North Africa Despite Challenges
Assalamu Alaikum dear brothers and sisters, I wanted to share some hopeful news about the economic growth forecasts for our beloved Middle East and North Africa region. The World Bank has recently raised its growth prediction for this year to 2.8%, slightly better than their earlier estimate. While the forecast for 2026 has been adjusted a bit lower to 3.3%, there are still signs of progress.
Particularly in the Gulf countries, growth is expected to pick up to 3.5% this year, benefiting from increased oil production and growth in other sectors like finance, construction, and transport. The UAE is leading the way with an anticipated growth of 4.8% this year, inching up to 5% by 2026. Saudi Arabia, Qatar, Kuwait, and Oman have also seen their growth estimates improve. Alhamdulillah, these positive changes come as voluntary oil production cuts are being lifted.
On the other hand, some developing oil-exporting countries like Algeria, Iran, Iraq, and Libya face challenges due to tighter sanctions and reduced oil exports, leading to slightly lowered growth expectations. However, oil-importing countries in the region are expected to see better growth at 3.7%, thanks to increased private consumption, investment, agriculture, and tourism.
Even in areas affected by conflicts such as Afghanistan, Lebanon, Syria, the West Bank, Gaza, and Yemen, there has been an upward revision in economic forecasts since April, though these regions continue to face many hardships. The World Bank reminds us that ongoing issues like displacement, water and food shortages, and unemployment remain significant hurdles, especially with a growing working-age population.
Globally, the economy is projected to grow by 2.3%, a bit better than earlier predicted, helped by reduced policy uncertainties. While trade tensions have caused some instability, their impact on our region's exports is expected to be limited. Instead, fluctuations in oil prices will have a larger effect, especially for oil-exporting countries.
Recently, OPEC+ agreed to increase oil production slightly, which, along with trade tensions, has kept prices volatile. Brent crude is expected to average about $69 per barrel this year, with prices likely to stay around current levels in the near future.
Sadly, conflicts, especially in Gaza, continue to cause immense suffering and severely hamper economic activity. The humanitarian crisis there remains dire with shortages of food, water, and medical supplies, and the health system is under great strain. Economic activity in Gaza has nearly stopped, with a huge drop in GDP over recent years. The West Bank's economy is showing some growth, but this is mainly due to a low starting point and increased Palestinian labor in Israel.
The report also highlights that women's talents are not being fully utilized across the region, although some countries like Saudi Arabia have made progress in increasing female participation in the workforce. More efforts are needed to remove barriers and create jobs for our growing young population, including legal reforms and support like affordable childcare.
As the World Bank's vice president for the region noted, unlocking women's full potential requires comprehensive action. May Allah (SWT) grant our region prosperity, peace, and the strength to overcome these challenges. Ameen.
https://www.thenationalnews.co