Arab Region’s GDP exceeds $3.5 trillion in 2024, set for 4.1% growth in 2025
In 2024, the Arab region’s GDP saw a growth of 1.8 percent, surpassing $3.5 trillion despite facing numerous regional challenges. The economic contributions of Saudi Arabia, the UAE, Egypt, Iraq, and Algeria remained dominant, accounting for more than 72 percent of the total Arab GDP.
A report from the Arab Investment & Export Credit Guarantee Corporation (Dhaman) forecasts a positive economic outlook for the region, projecting a growth rate of 4.1 percent for the coming period.
This anticipated growth is expected to be driven by stronger performance in 14 Arab countries, particularly the nine oil-dependent nations, which together make up over 78 percent of the Arab GDP.
While the region faces many challenges, the outlook is cautiously optimistic, with hopes for a reduction in political instability, improvement in oil and gas exports, and a rise in goods and services produced within the region.
However, the report highlighted several challenges faced by the Arab world’s economy in 2024.
A decline of roughly 4 percent in crude oil production, combined with a 1 percent decrease in global oil prices, had a negative impact on the region’s performance. Furthermore, the spillover effects of the conflict in Gaza were felt across neighboring countries, including Lebanon, Yemen, Syria, and Iraq.
The ongoing armed conflict in Sudan, climate change, and rising foreign debt also contributed to the region's economic difficulties.
The average per capita GDP in the Arab region rose by 1.2 percent, reaching $7,557 in 2024. This figure is expected to increase by 1 percent in 2025, reaching $7,602 per person.
The Arab population grew by 2 percent in 2024, surpassing 467 million people. At the same time, the region’s unemployment rate rose to an average of 9.7 percent.
Inflation across the Arab region increased to approximately 12 percent in 2024, but it is projected to decline to 8.5 percent in 2025, which would provide some relief.
The region’s combined budget surplus of $15 billion in 2023 turned into a deficit of $58 billion in 2024, representing a sharp reversal. This deficit is expected to widen further to $68 billion in 2025, making up around 2 percent of the region’s GDP.
Debt levels also showed mixed trends. The ratio of government debt to GDP decreased to 48.3 percent in 2024, with a further expected decrease to 47.6 percent by the end of 2025.
In contrast, the external debt ratio increased to about 56 percent of the GDP in 2024 but is anticipated to fall to 54.5 percent in 2025. These changes reflect ongoing challenges related to debt management in the region.
Arab foreign trade in goods and services grew by 3.6 percent, reaching over $3.3 trillion in 2024. Exports rose by about 1 percent, while imports grew at a much faster pace of 7 percent. This led to a 33 percent reduction in the trade balance surplus, which decreased to $177 billion in 2024. This shift in the trade balance reflects the growing import demand across the region.
The current account surplus of Arab countries dropped significantly by 51 percent to $89 billion in 2024, representing 2.5 percent of the Arab GDP. Projections indicate that this surplus will decrease further to $47 billion, or 1.3 percent of GDP, in 2025. This decline in the current account surplus is a concerning trend for the region’s economic stability.