Economic Outlook – Baghdad
The World Bank projects that the economic growth rate for Gulf states will reach 3.4 percent in 2025, with a subsequent increase to 4.1 percent in 2026. In contrast, the overall growth rate for the Middle East and North Africa (MENA) region is expected to be 3.3 percent.
Osman Dion, Vice President of the World Bank for the MENA region, highlighted that the economic forecast indicates sustained growth, albeit at differing rates between oil-exporting and oil-importing countries.
During the World Summit on Governments held in Dubai, Dion emphasized the robust economic conditions in Gulf nations, largely attributed to their ongoing efforts in economic diversification. Conversely, he noted that other regional countries are grappling with challenges stemming from conflicts and instability.
Dion provided a positive outlook for the region, pointing out that economic diversification plays a crucial role in facilitating growth in both oil-producing and non-oil-producing countries. He underscored the importance of stability as a fundamental driver of growth, stating that peace and stability are essential for enhancing economic development.
According to Dion, the World Bank recognizes the critical nature of stability in fostering growth. He stated that as the region advances towards greater peace, the prospects for stronger economic growth become increasingly attainable.
He also highlighted that these countries are leveraging investments in non-oil sectors, which provide a competitive edge over nations facing instability.
On another matter, Dion discussed the memorandum of understanding signed by the World Bank with the Mohammed bin Zayed Water Initiative, noting that this partnership is aimed at tackling water security challenges in the region and beyond. He emphasized that water is not only vital for life but also serves as a key driver of economic growth. Innovative solutions are necessary, especially as water scarcity poses a significant challenge in the MENA region.
Dion outlined four primary dimensions of the water issue in the region: infrastructure destruction from floods, drought due to water shortages, pollution of water resources, and substantial waste resulting from leakage and mismanagement.
He pointed out that while the region extensively employs water desalination techniques—producing approximately 55 percent of the world’s desalinated water—there remains a pressing need to explore alternative solutions. These include water reuse, enhanced management of water resources, and the incorporation of artificial intelligence and modern technologies to monitor leaks and optimize smart irrigation systems for improved efficiency.
Dion reaffirmed that the Mohammed bin Zayed Water Initiative plays a pioneering role in enhancing water security, stating that a safe world is a stable world—an aim the World Bank is committed to supporting through this partnership.
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