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- Global Research
- General Research Insights
- Future cities
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- Energy transition
- Trade flows
A growth state of mind
Middle East, North Africa and Türkiye outlook
From reform and diversification to oil price uncertainties, there are many ways to look at the Middle East, North Africa and Türkiye (MENAT). With a wide range of diverse economies, strategies and objectives, we believe it is critical to explore the nuances among the opportunities.
Individual nations’ prospects vary widely from an economic perspective, but we remain constructive on the overall regional outlook. We estimate an average pace of growth of above 3.5% this year and are particularly bullish on the gains that some of the Middle East’s largest economies seem likely to deliver.
Potential headwinds include the oil price. Although the Gulf has made progress in economic diversification, oil continues to set the rhythm for growth. For us, an oil price at USD70/b is the floor of the region’s comfort zone. Any rise in geopolitical uncertainty could also have an impact on sentiment.
>3.5%
Average MENAT GDP growth, 2025 (HSBC forecast)
10
Of the world’s top 15 locations for solar potential are in MENAT (World Bank)
Many of the region’s core strengths, though, are long-term in nature. Chief among these are the region’s favourable demographics. MENAT stands out for its growing and young population, which provides an enormous demographic advantage. This puts the region in a position to invest heavily in the infrastructure required to build new industries, galvanise the private sector, and create more jobs.
Demographic demands require urban solutions, which is why the Gulf Cooperation Council (GCC) is leading a raft of sustainably planned future cities with aspirations to showcase efficient urban design and services. We see Saudi Arabia offering one of the world’s best testbeds for giga-project development of future cities.
The region also has a distinctive sustainability agenda. MENAT’s share of global CO2 emissions peaked at 5.6% in 2016 (Energy Institute), and we expect a continued decline as domestic decarbonisation advances. Considering world-leading solar potential (10 of the top 15 countries are in the Middle East and North Africa, including Egypt, Oman, Saudi Arabia, and the UAE, according to the World Bank), MENA economies have the opportunity to lead in providing cost-effective solutions to decarbonise industry.
Tourism is a critical component of diversification plans
All GCC countries have formulated a strategy based on an economic vision to diversify away from their dependence on oil, encompassing a broad range of sectors from financial services to telecommunications and real estate. Tourism is another critical component, with the potential launch of a new GCC unified tourist visa likely to support visitor numbers. Health tourism is part of the story for locations such as Türkiye, with the healthcare sector also likely to benefit from growing domestic demand.
Finally, trade flows will continue to be an increasingly significant aspect for the region. We see the economic connectivity between Asia and the Middle East set to soar in coming years, expanding well beyond energy trade. Global Research expects that two-way investment, led by the China-Saudi and India-UAE corridors, could surge to USD36bn annually by 2035. And heightened global tariff uncertainty could result in Asian producers increasingly turning to the Middle East as an export market and investment destination.
For the MENAT region, we see a range of opportunities on the horizon, but also the risk of headwinds. From reform and economic diversification to geopolitics and oil – amongst the uncertainties we see one constant: a growth state of mind.
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