Post by : Maya Rahman

The Arab Investment & Export Credit Guarantee Corporation, commonly referred to as Dhaman, reports that Arab GDP saw a 1.7 percent increase in 2025, totaling around US$3.8 trillion. This growth occurred against a backdrop of regional political and economic hurdles. The majority of this economic output is linked to Saudi Arabia, UAE, Egypt, Algeria, and Iraq, which alone account for approximately 73 percent of the region's total GDP.

Dhaman's outlook suggests continued growth for the Arab economy in 2026, forecasting a 5.6 percent increase in GDP, which should reach about US$4 trillion. This growth is expected across 19 Arab nations, including eight oil producers contributing to more than 70 percent of the total Arab GDP. Optimism persists that easing regional conflicts and ongoing economic reforms will bolster trade and service sectors.

In 2025, the Arab region experienced varied economic outcomes due to falling global oil prices, geopolitical uncertainties, and social pressures. According to the IMF, while some nations faced challenges, others remained stable. However, the GDP measured by purchasing power parity rose by 6.1 percent, reaching over US$9.8 trillion, with expectations to exceed US$10 trillion by 2026.

The average unemployment rate in Arab states decreased slightly to 9.4 percent in 2025, with projections indicating a further decline to 9.2 percent for 2026. Inflation also showed signs of easing in 16 Arab countries, as the average consumer price increase dropped to 10.3 percent in 2025, anticipated to fall to 8.1 percent in 2026.

Among Arab currencies, seven—including those from Tunisia, Qatar, UAE, Morocco, Algeria, Djibouti, and Syria—strengthened against the US dollar, while various others remained stable or experienced declines. Total investments across 14 Arab nations rose by 5.2 percent, reaching nearly US$864 billion in 2025, with projections pointing towards surpassing US$910 billion in 2026.

Government debt in the Arab region climbed to 46.2 percent of GDP in 2025 and may exceed 47 percent in 2026, while external debt rose to 54.6 percent of GDP, with a slight anticipated increase in 2026. The current account surplus, meanwhile, dipped to US$63 billion in 2025, or 1.7 percent of GDP, with a further decrease projected to US$41.5 billion in the upcoming year.

Foreign exchange reserves in the Arab countries increased by 3.4 percent to about US$1.2 trillion, sufficient to cover approximately 5.6 months of goods and services imports. These reserves are forecasted to grow by 2.5 percent in 2026, providing slightly more coverage at 5.7 months.

#Business News