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Regional pick up, but divergence under the surface

The Middle East and North Africa is set to record its fastest GDP growth – outside of the post-pandemic recovery – in well over a decade over the course of 2026-27. Egypt and Morocco are emerging as two bright spots in North Africa as improved competitiveness boosts export demand. The Gulf states will be bolstered by rising oil output as OPEC+ pushes ahead with recapturing market share. The UAE, Qatar, and Kuwait have the strongest balance sheets and can afford to maintain a supportive fiscal stance even as oil prices fall back. But Saudi Arabia’s turn to fiscal consolidation will result in much slower non-oil growth.