Prime Highlights:
- The Arab region’s GDP is projected to grow to $4 trillion in 2026, marking a 5.6% increase from 2025.
- Investments and foreign reserves are rising, with investments reaching $864 billion and reserves covering 5.6 months of imports.
Key Facts:
- Job opportunities are improving, with unemployment falling to 9.4% in 2025 and expected to drop further in 2026.
- Price stability is strengthening, as inflation eases to 10.3% and is forecasted to decline next year.
Background:
The Arab region’s economy is expected to hit $4 trillion in 2026, growing 5.6% from last year. The Emirates News Agency (WAM) reports that this growth will come from 19 countries, despite ongoing geopolitical and economic challenges.
Dhaman’s report shows that in 2025, the region’s GDP grew 1.7% to about $3.8 trillion. Most of the economic activity is concentrated in a few countries, with Saudi Arabia, the UAE, Egypt, Algeria, and Iraq contributing nearly 73% of the total output.
The organization noted that the forecast is supported by cautious optimism that regional tensions may ease, structural reforms will advance, and merchandise and service exports will continue to grow. Nevertheless, mixed performance indicators persisted throughout 2025 amid weaker oil prices and heightened global uncertainties.
In terms of purchasing power parity, Arab GDP surged 6.1 percent to more than $9.8 trillion and is projected to cross the $10 trillion mark in 2026. GDP per capita fell slightly by 0.3% to $7,806, highlighting the gap between oil-rich countries and lower-income economies.
The labor market improved a little, with unemployment dropping to 9.4% in 2025 and expected to decline further in 2026. Inflation fell to 10.3% and is expected to drop further next year.
The budget deficit rose 53% to $95 billion in 2025, mainly because oil prices fell 13%. Government debt went up, and the current account surplus fell.
Despite challenges, investments rose to $864 billion, and reserves reached $1.2 trillion, covering 5.6 months of imports.
