The United Nations Economic and Social Commission for Western Asia (ESCWA) released the summary of the 2023-2024 issue of its annual "Survey of Economic and Social Developments in the Arab Region”, highlighting the exacerbated socioeconomic challenges faced by the region since 2023 and their repercussions until 2026. The report delves into several of these crises, including wars, political tensions and the global economic landscape characterized by energy price fluctuations, providing detailed projections of future growth trajectories.
According to the report, the global economy is expected to have grown by 2.7% only in 2024, due to factors including persistently high interest rates, threats to international trade, and the increasing risk of climate disasters, with these factors affecting both regional and global economies.
Against this backdrop, the report foresees slow economic growth in the Arab region as well, by around 2.5% in 2024, due to the significant impact of the Israeli wars on Gaza and Lebanon and the conflict in the Sudan, as well as energy price fluctuations. However, growth is expected to pick up again in 2025, reaching 3.9%.
The report underlines that, despite the voluntary reduction of oil production by OPEC+ member States during the second half of 2023, oil supply continues to exceed demand, adding pressure on oil exporters. Gulf Cooperation Council (GCC) countries are expected to continue their investments in non-hydrocarbon sectors, which would offset a significant part of the losses associated with voluntary cuts in oil production. Their gross domestic product (GDP) is thus expected to grow by 4.3% in 2025.
While the report argues that increased demand for phosphate and gas will drive growth in middle-income Arab countries, where it is expected to reach 2.8% in 2024 and 3.6% in 2025, it maintains that the repercussions of the war on Gaza and Lebanon will take a toll on neighbouring Egypt and Jordan.
Meanwhile, Arab conflict- and war-torn countries continue to face severe contraction. The economy of the State of Palestine has contracted by at least 13.3%, and the economy of the Sudan by at least 12.6% in 2024. Lebanon’s GDP has also contracted by at least 1.9% in 2024.
As for Arab least developed countries, the report foresees growth by 4.4% in 2024, driven by increased activity in extractive sectors.
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