عربي English Türkçe اردو فارسى
Logo
Latest News
Business

World Bank Again Lowers MENA Growth Forecasts

Rescue workers at a site damaged by an Israeli airstrike in Qana, south Lebanon (Reuters)
Rescue workers at a site damaged by an Israeli airstrike in Qana, south Lebanon (Reuters)
TT
TT

World Bank Again Lowers MENA Growth Forecasts

Rescue workers at a site damaged by an Israeli airstrike in Qana, south Lebanon (Reuters)
Rescue workers at a site damaged by an Israeli airstrike in Qana, south Lebanon (Reuters)

The World Bank has lowered its growth forecast in the Middle East and North Africa (MENA) to 2.2% this year from 2.4% in its June forecast because of uncertainties heightened by the conflict in the region.

In its latest semi-annual MENA Economic Update, entitled Growth in the Middle East and North Africa, the Bank said that growth in the Gulf Cooperation Council (GCC) countries is forecast to rise to 1.9% in 2024 from 0.5% in 2023.

Growth in the MENA region reached 1.8% in 2023.

For GCC economies, the current account surplus is projected to decrease from 8.1% of GDP in 2023 to 6.6% 2024.

Although all GCC countries have consistently maintained current account surpluses in both years, the report said most are expected to have a decline in 2024.

In Saudi Arabia, the report also projects the economy to grow by 1.6% in 2024 and 4.9% in 2025.

In Qatar, the economy is expected to grow by 2% in 2024 and 2.7% in 2025 while in the UAE, it will grow by 3.3% in 2024 and 4.1% in 2025 and in Bahrain, 3.5% in 2024 and 3.3% in 2025.

Fiscal surpluses among GCC countries are expected to narrow, reaching 0.2% of GDP in 2024, down from 0.5% in 2023, and 6.3% in 2022.

Also, growth is expected to decelerate in the whole of developing MENA, the Bank report noted.

In developing oil importers, it will decelerate from 3.2% in 2023 to 2.1% in 2024, as the repercussions of the ongoing conflict spill over directly onto some countries and exacerbate pre-existing vulnerabilities in others.

Real GDP growth in developing oil exporters will decline from 3.2% in 2023 to 2.7% in 2024.

Effects of Ongoing Conflict

The report said the ongoing conflict in the Middle East has already inflicted a heavy human and economic toll.

The Palestinian territories are nearing economic collapse, with their largest economic contraction on record.

Gaza’s economy shrank by 86% in the first half of 2024 and the West Bank is facing an unprecedented fiscal and private sector crisis.

In conflict-affected Lebanon, the outlook remains highly uncertain and will be shaped by the trajectory of the conflict.

Meanwhile, other neighboring countries like Jordan and Egypt have been affected by declines in tourism receipts and fiscal revenues.

“Peace and stability are the foundation of sustainable development,” said Ousmane Dione, World Bank Vice President for the Middle East and North Africa.

“The World Bank Group is committed to remaining engaged in the conflict-affected areas of the Middle East and North Africa, and to building a future worthy of all people of the region,” he added.

Opportunities of Accelerating Inclusive Growth

The report also looks at key windows of opportunity where countries can rapidly advance inclusive growth by accelerating reforms.

This includes rebalancing the footprint of the public and the private sectors, better allocating talent in the labor market, closing the gender gap, and promoting innovation.

Despite the significant gains in levels of education over the last 50 years, the rate of female labor force participation in the Middle East and North Africa stands at 19 percent – the lowest in the world.

Closing gender employment gaps would result in a remarkable 51 percent increase in per capita income in the typical MENA country. For economies to thrive, women must be included, the report said.

Roberta Gatti, World Bank Chief Economist for the Middle East and North Africa said: “Transforming the role of the state would lead to substantial gains in productivity.”

“For example, the region has the largest share of public sector employees in the world, particularly women. But unfortunately, in MENA, a larger public sector does not necessarily correspond to better public goods and services. Mobilizing talent toward the private sector would improve the allocation of resources, with aggregate productivity gains up to 45%,” she added.

The report said that tapping into the frontier of global knowledge and technology will also boost growth in MENA.

More international trade, leveraging the region’s strategic geographic location, can facilitate this process of infusion and innovation.

Also, improving data quality and transparency – which are lagging behind by international standards – is another key lever to facilitate the diffusion of ideas.

Most Viewed

 
 
Business

Iran War and Rising Fuel Costs Could Boost Panama Canal Traffic, Administrator Says

A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
TT
TT

Iran War and Rising Fuel Costs Could Boost Panama Canal Traffic, Administrator Says

A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)

Panama Canal Administrator Ricaurte Vásquez said Thursday that the conflict in the Middle East and rising fuel costs could ultimately benefit the interoceanic waterway as global shippers adjust routes.

In an interview with The Associated Press, Vásquez said that higher energy, fuel and navigation costs could make the Panama Canal a more attractive option for commercial traffic.

“When costs increase, in general when the price of marine fuel rises, the Panama Canal becomes a more attractive route,” Vásquez said.

Oil prices have risen amid the war in the Middle East, which has led to the temporary closure of the Strait of Hormuz by Iran in response to US and Israeli attacks. About one-fifth of the world’s oil passes through the waterway at the mouth of the Gulf.

If higher energy costs persist, routing cargo through Panama can cut voyages by between three and 15 days, depending on the route, while reducing fuel consumption, he said.

Vásquez said higher fuel costs are expected to affect container ships, bulk carriers and tankers transporting liquefied natural gas. If Middle Eastern supplies are disrupted, shipments may be replaced by other sources, including the United States, which could redirect some LNG cargo from Europe to Asia via Panama.

Gerardo Bósquez, an executive with the Panama Maritime Chamber, said a prolonged conflict could reshape global trade routes, with gas transport among the segments likely to benefit.

Vásquez cautioned that any changes will not be immediate and will depend on how long cargo operators expect the conflict and instability in the Gulf last.

Business

ONS Data: UK Economy Lost Steam Unexpectedly at Start of 2026

FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
TT
TT

ONS Data: UK Economy Lost Steam Unexpectedly at Start of 2026

FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo

Britain's economy stagnated unexpectedly in January and expanded weakly in preceding months, according to official data on Friday that showed only tepid growth during the lead-up to the US-Israeli war in Iran.

The figures mean British gross domestic product has been essentially flat since June, ending January at the same level as six months earlier.

GDP rose during the three months to January by 0.2%, the Office for National Statistics ⁠said, against expectations ⁠in a Reuters poll of economists for a 0.3% increase.

The flat reading for January alone also dashed the median prediction for a 0.2% month-on-month increase.

Sterling slipped against the US dollar on the back of the figures, which showed no ⁠growth in the dominant services sector in January, against modest upticks in manufacturing and construction output.

Last month, the Bank of England said it expected the economy to grow 0.3% in the first quarter as a whole and 0.9% over 2026 as a whole - although that was before the conflict in Iran kicked off, prompting a surge in oil prices.

Earlier this week, finance minister Rachel Reeves ⁠said ⁠it was too soon to say how soaring energy prices would affect Britain's economy.

But investors see it as more exposed than other Western European economies due to its weak public finances, reliance on natural gas for electricity generation, and already high rates of inflation.

Financial markets no longer believe the Bank of England is likely to cut interest rates this year, and investors will be watching the central bank's communications carefully at next Thursday's interest rate announcement.

Business

Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
TT
TT

Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)

Air freight rates have risen by as much as 70% on some routes since the start of the US-Israeli war on Iran, data shows, as the conflict limits flights, blocks some ocean shipments and pushes up jet fuel costs.

Rates on routes between South Asia and Europe have been the most affected by Middle Eastern airspace closures and security issues, industry experts said, after the conflict has stranded more than 100 container ships in the area around the critical Strait of Hormuz oil export corridor.

Products like inexpensive generic medicines from India destined for the European Union, Africa and some Arab countries like Saudi Arabia and the United Arab Emirates typically move on container ships through the strait, said pharmaceutical supply chain expert Prashant Yadav.

"The main shift I’ve heard about involves companies moving generic ‌medicines from ocean ‌freight to air cargo," said Yadav, a senior fellow at the Council on ‌Foreign ⁠Relations.

The shift to ⁠air cargo is significant because air freight handles about one-third of global trade by value, making rate spikes a potential inflationary pressure on goods ranging from fresh food to pharmaceuticals and electronics.

"Customers are shifting freight from ocean to air, however it is extremely expensive - typically 5x to 10x higher - and those costs are climbing as capacity tightens," said Steve Blough, chief supply chain strategist at logistics software firm Infios. "More often, shippers are moving a limited quantity by air to bridge a gap."

JET FUEL PRICE DOUBLES

The jet fuel price has doubled since the start of the conflict, and Danish container ⁠shipping giant Maersk said this week its own air cargo service is now applying ‌fuel surcharges and war risk levies.

The airspace closures have also cut ‌cargo capacity in freighters and passenger planes as airlines take longer routes to avoid the conflict zone, further pressuring rates.

Dubai and ‌Doha are normally among the world's busiest air cargo hubs, but operations at those airports have been ‌severely limited by the Middle Eastern conflict.

Niall van de Wouw, chief air freight officer at transportation pricing platform Xeneta, attributed higher air cargo rates to a "dramatic reduction" in capacity at key Middle East transshipment hubs more than higher fuel prices.

Ronald Lam, the CEO of Hong Kong's Cathay Pacific Airways, said many of its freighter flights to Europe normally stop in Dubai to refuel ‌and pick up more cargo.

"But because of the situation in Dubai, we're now skipping that stopover and we are flying direct from Hong Kong to ⁠Europe with some payload restriction, ⁠because we couldn't uplift fuel in between," he said on an earnings call on Wednesday.

According to an air freight index from freight booking and payments platform Freightos, off-contract spot rates from South Asia to Europe have soared 70% to $4.37 per kg from $2.57 per kg just before the war began.

South Asia-North America rates are up 58% to $6.41 per kg, and Europe-Middle East rates have risen 55% to $2.79 per kg.

A significant share of air cargo exports from South Asia usually travels through Gulf hubs and some has had to reroute through East Asia, said Judah Levine, Freightos' head of research.

"That being said, we have seen the price increases on many of these lanes slow, level off or even decline slightly in the last couple days," he said.

"These trends may reflect Asian and European carriers adding capacity to these long-haul lanes to make up for the missing Gulf capacity, and they may also reflect some of the Gulf carriers - most importantly Emirates - having restarted operations and increasing the number of flights that are now leaving and arriving at these important Gulf hubs."