IMF Raises Growth Expectations for the Arab Region in 2025 and 2026

SadaNews Economy - The International Monetary Fund (IMF) has maintained its optimistic outlook for the economy of the Arab region, expressed three months ago, by raising its growth forecasts for the Middle East for the current and the next year for the second time, based on an improvement in oil prices compared to its previous estimates and the accelerated performance of the Saudi economy, which is the largest in the region.

The fund said in its "World Economic Outlook" report issued today, Tuesday, that growth in the Middle East and Central Asia is expected to accelerate as the effects of oil production and shipping disruptions fade and the impact of ongoing conflicts diminishes.

The new growth forecast for the economies of the Middle East and North Africa in 2025 increased by 0.1 percentage points to 3.3% compared to the July version of the report, which was at 3.2%.

For 2026, the fund believes that the region's growth will accelerate to 3.7%, while its July forecast was only 3.4%.

The "International Monetary Fund" had revised its pessimistic estimates regarding the region’s growth in its July report after two consecutive reductions in forecasts, which settled in the April report at 2.6% for this year and 3.4% for the next year.

Improvement in Oil and Accelerated Growth in Saudi Arabia and Egypt

The improvement in oil prices, coupled with the decrease in geopolitical disruptions, will be the major driver of accelerated growth. The report released by the fund on the sidelines of the autumn meetings in Washington raised its expectations for the average oil price in 2025 to $68.9 per barrel compared to $68.2 in the July estimates, and to $65.8 per barrel in 2026 compared to $64.3 in the July estimates.

The most significant support for growth in the Middle East will come from the Saudi economy, which is expected to grow by 4% during the current and next years, according to the report.

The fund's previous growth forecasts for Saudi GDP in 2025 were at 3.6%, and in 2026 at 3.9%.

Regarding Egypt, the report described the performance of the Arab nation with the largest population as "better than expected during the first half of the year," which led the fund to adjust its growth expectations for the Egyptian economy in the current fiscal year 2025 – 2026 upwards by 0.4 percentage points to 4.5%.