The Middle East and North Africa region's economic outlook has seen a slight improvement, with real GDP growth forecasted at 3.3 percent in 2025, primarily due to robust non-oil growth in GCC countries. S&P Global Market Intelligence analysts note that despite the anticipated slowdown in non-oil sectors during 2024, the overall trend remains positive.
The World Bank anticipates the UAE's real GDP growth to surge to 3.9 percent in 2024, driven by Opec+'s planned substantial increase in oil production in the latter half of the year and a rebound in global economic activity. Oil output is expected to grow by 5.8 percent in 2024, while non-oil sectors, including tourism, real estate, construction, transportation, and manufacturing, will continue to bolster economic expansion with a 3.2 percent growth rate.
Global real GDP growth is projected at 2.7 percent for both this year and next, though a temporary slowdown in quarter-over-quarter growth rates is likely in the second half of 2024 due to high uncertainty affecting investment and global trade. However, a recovery is foreseen for 2025 and 2026 as more favorable financial conditions take effect, according to the August Global Economic Forecast Update.
Ken Wattret of S&P Global Market Intelligence observes that while early August's market volatility has subsided, the economic and policy landscape remains uncertain. He suggests that fears of an immediate US recession may be exaggerated, and while a severe economic downturn cannot be entirely discounted, the current view is that the economy is moving towards a period of sub-optimal growth.
The ICAEW predicts that the GCC's non-oil sector will continue to be the primary driver of regional growth in 2024 and beyond, despite an expected overall GDP slowdown to 2.2 percent due to extended Opec+ output cuts. The Economic Insight report, commissioned by ICAEW and compiled by Oxford Economics, indicates that these cuts will delay the recovery in GCC energy sectors, with oil output projected to decline by 2.6 percent this year.
The World Bank has revised its GCC economic outlook upwards, anticipating regional growth to hit 4.7 percent in 2025, up from a previous estimate of 3.8 percent. It also forecasts the UAE's economy to expand by 3.9 percent in 2024, supported by increased oil production and robust non-oil sector performance.
