International monetary funds said that on Thursday they now expect the Middle East and North African economies to grow only 2.6% in 2025 due to uncertainty originating from the global trade war and weaker oil prices burden the region.
Fresh projections marked a decrease in the sharp ranking of October projections from 4% growth and came when the region wrestled with geopolitical tension, softer external demand and oil market volatility.
“Uncertainty can affect the real economy, consumption, investment … All of these elements cause our projections,” Jihad Azour, IMF Director for the Ministry of Middle East and Central Asia, told Reuters in an interview.
“The direct impact of the tariff steps is limited due to integration in terms of trade between regions and the US is limited.”
The IMF also refers to gradual recovery in oil production, protracted regional conflicts, and postponed structural reforms, especially in Egypt, in the latest regional economic outlook report released in Dubai.
“The ongoing conflict in the Mena region has led to deep humanitarian costs and left deep economic scars,” he said in the report, adding that the impact was very severe for the economy of oil imports in the region.
Non-minian importers are now expected to see real GDP growth of 3.4% in 2025, versus the previous estimate of 3.6%.
Different views
Growth between non-PULF Cooperation Council Oil Exporters is expected to slow down with one point percentage point in 2025-revised down sharp-before doing simple recovery in 2026.
On the other hand, the GCC economy is projected to strengthen, although at a slower speed than anticipated in October, in the midst of cutting OPEC+ voluntary production extended until April, the phases are gradual at the end of 2026, and weaker non-minyak activities.
“With all these changes and challenges, it is also important to find new trading partnerships,” Azour said, referring to GCC, a block consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
The IMF Project GCC GCC growth for 2025 in 3%, dropped from October with an increase of 4.2%.
GCC countries have increased efforts to diversify their economy, with large initiatives such as the vision of Saudi Arabia and UAE encouragement into tourism, logistics and manufacturing aimed at reducing dependence on hydrocarbons.
“Trading diversification, acceleration of structural reform, and increased productivity are all elements that will help the non-miny sector to maintain a strong growth rate,” Azour said.
Source: Reuters
