Economic Research

The global economic outlook has markedly weakened due to tariff developments with the IMF slashing its growth forecast to 2.8% in 2025, driven by hits to the US and China.

Economic growth should return to positive territory in 2025-26 as the oil sector expands following the unwinding of OPEC+ voluntary production cuts. 

Economic growth is expected to rise to even stronger levels of 3.4% on average in 2025-26 as still-solid non-oil expansion is met with a recovery in oil sector output. 

Economic growth in Bahrain, Oman, and Qatar is forecast to proceed at a moderate pace in 2025 and 2026, buoyed especially by higher output volumes in the hydrocarbon sector. 

Egypt’s commitment to FX flexibility and fiscal discipline is becoming more deeply rooted, with limited foreign asset drawdowns in the banking sector and continued subsidy reforms.

Although downside risks to the UAE’s externally-exposed economy have increased, our base case outlook for 2025-26 remains relatively upbeat with GDP growth averaging 4.2% in 2025-26 led by higher oil production