The International Monetary Fund said emerging economies are showing exceptional resilience in the face of global volatility, as it cast the upcoming AlUla Conference for Emerging Market Economies as a key forum for recalibrating policy amid rapid financial and trade shifts.
Days ahead of Saudi Arabia’s decision to open its stock market to all categories of foreign investors on February 1, the IMF said the move would mark a turning point in boosting competitiveness and attracting stable capital inflows.
The AlUla Conference is scheduled to take place on February 8 and 9, 2026, amid heightened global economic uncertainty. The event will bring together policymakers from around the world, particularly from emerging markets, alongside leading economists and academics.
The importance of the conference lies in its role as a “policy laboratory,” offering space for deep reflection away from short-term market pressures, to review fast-moving trends and coordinate international efforts to safeguard investment and trade flows.
The IMF remains optimistic about emerging market performance, forecasting growth of about 4% over the next two years.
In a previous report, the Fund described this performance as “solid” by historical standards, noting that most regions had seen upward revisions to growth forecasts, reflecting a stronger-than-expected ability to absorb external shocks.
Between tariff shocks and artificial intelligence risks
In a virtual panel discussion held ahead of the conference, IMF Chief Economist Pierre-Olivier Gourinchas said the global economy had managed to “shake off” the immediate effects of tariff shocks, aided by the private sector’s agility in reorganizing supply chains and by a surge in investment in artificial intelligence that generated strong export flows, particularly in Asia.
He added that the decline in the dollar over the past year had helped ease financial pressures in many emerging markets, though the impact was “uneven,” especially for commodity exporters.
Gourinchas cautioned, however, that growth had become “narrow-based,” concentrated in a limited number of sectors, such as technology, raising questions about whether returns would continue to meet elevated expectations.
He warned that any market correction could trigger capital outflows and tighter financial conditions.
He also highlighted labor market risks, warning that the spread of artificial intelligence could displace jobs over time, creating additional challenges for policymakers.
Strong resilience
For his part, Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, expressed a very optimistic outlook for the Gulf Cooperation Council economies, noting they recorded strong performance in 2025 with growth of 3.4%, supported by economic diversification efforts and resilience to geopolitical shocks.
Responding to a question, Azour said GCC growth was expected to rise by another one percentage point to 4.4% in 2026, driven by strong non-oil sector performance and continued diversification efforts.
He said performance differences among GCC states currently depend on oil price developments and the level of financial buffers available to each country.
Azour added that massive Gulf investments in artificial intelligence technologies represent a strategic preparation for the transformative economic shocks the sector is expected to generate globally, providing additional growth opportunities for the region.
Regarding the regional role of GCC countries, he said they are major investors both within the region and beyond through foreign direct investment, as well as a vital source of financing for many countries.
Saudi market resilience
Asked about the ability of emerging markets to withstand global market shocks, Azour said the Saudi stock market had demonstrated high resilience, remaining strong and stable and only marginally affected by recent shocks that hit some emerging markets.
Indonesian equities fell sharply in Thursday trading after MSCI warned of a potential downgrade of the market’s classification, marking the worst two-day performance in nearly three decades.
Azour pointed to the upcoming opening of the Saudi stock market to non-resident investors on February 1, saying the move would significantly boost the market’s growth potential and deepen its financial base.
He stressed that maintaining international investor confidence and avoiding sudden capital outflows requires continued transparency and regulatory development, adding that Saudi Arabia’s market is now a key pillar of global emerging-market indices and is well positioned to withstand external pressures thanks to its macroeconomic strength and ongoing financial liberalization.
AlUla: an exceptional opportunity
Azour said the AlUla Conference represents an exceptional opportunity for policymakers worldwide, especially from emerging economies, to engage in deep reflection on current challenges.
He said the central theme of the conference would focus on identifying “the policies countries need to put in place” to confront trade shocks, address accelerating changes in the financial sector, and seize technological opportunities while fully recognizing their side effects.
He emphasized the importance of collective thinking among policymakers, experts, and academics in a “fast-moving world,” aiming to calibrate policies and raise certainty through coordination not only in public policy, but also in trade and investment.
Azour said the IMF looks forward to providing decision-makers with the opportunity to reflect and reassess the pace of recent economic trends, noting that the initiative comes at a time when global uncertainty has “reached its peak.”
