Jihad Azour: The UAE is leading growth, and Egypt is regaining its recovery momentum

The UAE leads growth, while Egypt regains momentum in recovery.

Jihad Azour: The UAE is leading growth, and Egypt is regaining its recovery momentum

The International Monetary Fund's report, "Resilience Amid Uncertainty: Will It Last?", showed that the economies of the Middle East and North Africa region continued to demonstrate remarkable resilience to successive shocks in 2025, despite rising geopolitical tensions and global economic uncertainty. 

In its report, "Regional Economic Outlook for the Middle East and Central Asia – Fall 2025," the Fund confirmed that countries in the region have been able to absorb the effects of international turmoil thanks to conservative fiscal policies, structural reforms, and a recovery in the oil, tourism, and agriculture sectors.

Resilient Economies Despite Turmoil

According to the report, most regional economies are expected to record higher growth rates in 2025 and 2026, with a gradual decline in inflation rates and improved public finances.

In an interview, Jihad Azour, Director of the Middle East and Central Asia at the International Monetary Fund, explained that "the region's economies in 2024 and 2025 were exposed to numerous shocks, from global trade fluctuations to geopolitical tensions and regional issues, but overall economic performance improved compared to last year."

 Azour noted that the Fund has observed an improvement in growth forecasts for both oil-exporting and oil-importing countries in the past six months, as both have demonstrated increased capacity to absorb economic and political shocks.

IMF: Middle East Economies Show Resilience in 2025

GCC Leads Regional Momentum

The Fund raised its growth forecast for the Gulf Cooperation Council economies to 3.9 percent in 2025, up from 3 percent in the previous estimate, and to 4.3 percent in 2026, driven by increased investment spending, expansion of non-oil sectors, and a gradual rise in oil production. The report also noted that Gulf economies continue to boost their investments in clean energy, technology, and infrastructure, making them a linchpin of regional economic balance.

The UAE and Saudi Arabia Lead the Way

The International Monetary Fund expects the UAE to achieve growth of 4.8 percent in 2025, expanding to 5 percent in 2026, supported by economic diversification projects and the expansion of the tourism sector. 

Azour emphasized that "over the past years, the UAE has been able to move quickly and adapt to crises, from the COVID-19 pandemic to subsequent shocks, thanks to the diversification of its economy, its investment in advanced technology, and its role as a global economic hub." 

He added that "the UAE's non-oil sector has become one of the largest in the region, supported by attracting international investment, developing public services, and increasing productivity." He noted that this model reflects the UAE's transformation into an integrated regional and international economic hub.

As for Saudi Arabia, the Fund raised its growth estimate to 4 percent in 2025, up from 3 percent in the previous forecast, benefiting from continued economic reforms and increased oil production. In contrast, the IMF lowered its forecast for the average price of a barrel of oil to $68.9 in 2025 and $65.8 in 2026, compared to $79 in 2024, reflecting ample supply and slowing global demand.

Egypt: Gradual Recovery and Growing Confidence

Among non-Gulf Arab economies, Egypt stands out as a special reform case. The IMF expects the Egyptian economy to grow by 4.5 percent in the current fiscal year, supported by fiscal reforms, increased infrastructure investment, an improved tourism sector, and increased remittances from workers abroad. 

Azour explained that "Egypt has entered a period of relative stability thanks to recent reforms and a gradual decline in inflation," noting that the IMF's support for Egypt has increased from $3.8 billion to $8 billion, in addition to another program to support climate change.

He emphasized that "the reforms implemented by Egypt with the support of the IMF programs have contributed to improving economic indicators, gradually increasing growth, and reducing inflation, which was a major challenge." 

He noted that the country has been able to adapt to difficult circumstances, including the repercussions of the war in Gaza and a decline in Suez Canal revenues of approximately $6 billion annually. Azour added that financial stability and exchange rate flexibility have given the Egyptian economy the ability to withstand external shocks and have boosted investor confidence.

Regarding the next phase, he explained that the priority is to accelerate the pace of reform by empowering the private sector and improving the business environment, in addition to redefining the role of the state to be "supportive, not competitive." 

He indicated that the Egyptian government is working to transform public assets to become more competitive by engaging the private sector or listing them on financial markets, in parallel with developing infrastructure and strengthening the social protection system.