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The rise of the Gulf economies

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In 2024, the region recorded growth of just 1.9%, held back by weak global demand, volatile oil markets and persistent geopolitical tensions. For 2025, the World Bank is counting on the gradual end of OPEC production cuts, the rebound of the agricultural sector and the resilience of private consumption as the main drivers of recovery. In detail, the member countries of the Gulf Cooperation Council (GCC) are expected to grow by 3.2% in 2025, and by up to 4.5% in 2026. For developing oil-exporting countries, growth is expected to be 0.8% in 2025, and 2.4% the following year. Oil importers, on the other hand, could benefit from more favorable conditions, with growth of 3.4% in 2025 and 3.7% in 2026. Countries such as Egypt should see growth rise from 2.4% in 2024 to 3.8% in 2025, underpinned by household consumption and falling inflation. Morocco, meanwhile, could record growth of 3.4%, and Tunisia, 1.9%.

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The Gulf States could benefit from renewed growth driven by the expected rise in oil production from May 2025 onwards. Saudi Arabia, in particular, should see its GDP grow by 2.8%, compared with 1.3% in 2024, thanks to the growing contribution of its non-oil sectors. Inflation, meanwhile, should remain contained overall in 2025, with an estimated median rate of 2.4% for the region. Nevertheless, this figure masks disparities: among importing countries, inflation is set to fall from 4.6% in 2024 to 3.6% in 2025, while it will remain around 2% in the Gulf economies. In Algeria, the trend is even more marked, with inflation expected to fall from 9.3% in 2023 to 4% in 2024, according to the World Bank.

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The human capital challenge: unleashing female talent

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Beyond the figures, the latest World Bank report emphasizes the decisive role of the private sector in unlocking sustainable growth potential. Today, this potential remains largely under-exploited. According to the report, the majority of companies in the region invest low, rarely innovate and struggle to train their employees. Labor productivity is stagnating, and a considerable gap persists between a small formal sector and a massive informal economy. Roberta Gatti, Chief Economist for MENA at the World Bank points out that: “A dynamic private sector is essential to unlock sustainable growth and inclusive prosperity in the region”. To achieve this, governments must “play their role as guarantors of competitive markets”. The report recommends an improved regulatory environment, better collection and use of economic data, more competition, and a reconsideration of the role of state-owned enterprises, which are too dominant in some countries.

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Another key lever identified by the World Bank is the optimization of human capital, and in particular the participation of women in the economy. Too often excluded from the labor market, women represent a source of growth that is still largely neglected. “Companies can attract more talent by recruiting women leaders, who in turn will hire more women,” explains Ousmane Dione, World Bank Vice President for the MENA region. In his view, reducing the employment gap between men and women could increase per capita income by around 50%. In addition to major structural projects, change will require the spread of best management practices in companies, increased support for female entrepreneurs and a general drive for economic inclusion, which will also involve the liberalization of social values.

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The MENA region is entering a decisive phase in its future. Growth is coming back, but it's not enough. Without structural transformation, labor market reform, modernization of the private sector and the inclusion of female talent, this upsurge is likely to remain fragile. There is still work to be done, but much has already been done. Governments are well aware that the opportunity to build the future of a prosperous region lies ahead of them.

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Sources : 

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https://economymiddleeast.com/news/mena-region-growth-rise-2-6-percent-2025-world-bank/

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https://www.arabnews.com/node/2598261/business-economy

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https://www.worldbank.org/en/region/mena/publication/mena-economic-monitor

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