The Middle East and North Africa is set to record its fastest pace of GDP growth (outside the post-pandemic recovery) since 2011 next year. Continued oil output hikes and the switch on of Qatar’s North Field will boost the Gulf economies, although lower energy prices are likely to curb how supportive fiscal policy can be in some places – particularly Saudi Arabia – and act as a constraint on non-hydrocarbon sectors. Elsewhere, we are optimistic on the growth prospects of Egypt and Morocco as their competitive external sectors boost GDP and ease external strains further.
Relations between the Gulf and the US are likely to strengthen further in 2026 as the region secures access to advanced technologies, although the macro benefits of this are only likely to be felt over the medium term. The prospect of financial assistance could encourage other countries in the region, such as Lebanon and Syria, to move closer to the US as well.
Drop-in: Will the AI bubble continue to inflate? How will US-China tensions shape trade flows? Will a new Fed chair lead to much lower US rates? We’ll be highlighting what we expect to be the key drivers of macro and markets in the coming year in online Drop-In briefings on Wednesday, 10th December. Register here for our World in 2026 Drop-Ins.
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