MENA forecast indicates strong GDP growth in 2026

The MENA region is expected to surpass global economic growth in 2026, due to increasing investment, digital transformation, and easing financial conditions, according to Mastercard’s Economic Outlook 2026 report, which was published on December 10th.    

In the report, the Mastercard Economics Institute projected a global GDP growth of 3.1% in 2026, while the MENA region’s GDP is expected to rise by 3.6%. Notably, the World Bank also forecasted boosted growth for the MENA region. 

Performance will differ among countries, as Qatar is expected to lead by 4.9% due to higher liquified natural gas (LNG) output, followed by Egypt at 4.4%. 

The UAE and Saudi Arabia are likely to grow by 4.3% and 3.6%, respectively, while Pakistan’s GDP is expected to rise by 3.6%. Oman, Bahrain and Kuwait will undergo moderate growth.

According to the report, public investment and continuous consumer spending will continue to drive activity and inflation is expected to settle down at around 2% in Gulf Cooperation Council (GCC) economies.

In reference to the anticipated growth in the MENA region, Khatija Haque, Chief Economist of Eastern Europe, Middle East and Africa (EEMEA) at the Mastercard Economics Institute, said, “Looking ahead to 2026, the economic forecast for the MENA region appears broadly favourable, driven in part by ongoing structural reforms. For oil-exporting countries, easing financial conditions will likely stimulate non-oil sectors, as interest rates decrease alongside rate cuts in the US. Reduced borrowing costs and controlled inflation are expected to benefit consumers, spurring demand across key sectors such as real estate, tourism, and retail. There are risks to the outlook, however, including geopolitical tensions and climate-related challenges, which may disrupt investment and economic activity.”

The Middle East and North Africa’s growth is supported by investment and new projects in renewables, construction and technology. These projects are reshaping supply chains while also creating new jobs.

Additionally, Egypt and other oil-importing countries are seeking foreign investment in the renewable energy sectors, including green hydrogen and solar power.

Trade connections are changing too, as MENA nations are conducting increased business exchanges with emerging markets in Eastern Europe, Africa and Asia. This expansion has been going on for two decades and may increase as global trade faces more division.

Another major factor discussed in the report is digital transformation, as Mastercard has forecasted increased use of AI and digital infrastructure to scale up productivity. Initiatives such as the UAE’s AI 2031 plan and Saudi Arabia’s investment push are already reportedly attracting new projects into the region.

The digital transformation is impacting small businesses too, as the report highlights that SMEs (Small and medium-sized enterprises) account for around 37% of retail spending in the UAE, with their share of online sales rising each year. 

In terms of consumers, the report says, they will remain selective, willing to spend on travel and live events while staying cautious on everyday goods. This trend already exists as business trips drove travel growth in the MENA region, and the MENA hospitality market is expected to reach over $487 billion by 2032. 

The report uses public data, proprietary data sets and anonymised Mastercard transaction insights to assess global economic trends for 2026.

Mastercard, Maghrebi.org