Bahrain Joins Industrial Partnership for Sustainable Economic Development

The second Higher Committee meeting of the Industrial Partnership for Sustainable Economic Development kicked off in Cairo on Monday. (Asharq Al-Awsat)
The second Higher Committee meeting of the Industrial Partnership for Sustainable Economic Development kicked off in Cairo on Monday. (Asharq Al-Awsat)
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Bahrain Joins Industrial Partnership for Sustainable Economic Development

The second Higher Committee meeting of the Industrial Partnership for Sustainable Economic Development kicked off in Cairo on Monday. (Asharq Al-Awsat)
The second Higher Committee meeting of the Industrial Partnership for Sustainable Economic Development kicked off in Cairo on Monday. (Asharq Al-Awsat)

The second Higher Committee meeting of the Industrial Partnership for Sustainable Economic Development kicked off in Cairo on Monday.

The committee, which includes Egypt the United Arab Emirates and Jordan, announced and welcomed Bahrain as a new member, represented by Minister of Industry and Commerce Zayed bin Rashid al-Zayani.

Egyptian Minister of Commerce and Industry Nevine Gamea, UAE Minister of Industry and Advanced Technology Sultan bin Ahmed al-Jaber and Jordan's Minister of Industry, Trade and Supply Yousef al-Shamali co-chaired the meeting.

The committee shortlisted 12 projects worth $3.4 billion to move into feasibility studies.

The event was a continuation of the executive committee meetings held over the past two days and a culmination of weeks’ long sectoral workshops of experts in the fields of pharmaceuticals, agriculture, fertilizers and food.

The Executive Committee received 87 industrial project proposals focused on fertilizers, agriculture and food.

In the next phase, the Partnership will focus on the metals, chemicals, plastics, textiles and clothing sectors.

The Committee held its first meeting in early June and discussed mechanisms for expanding the partnership by welcoming new members.

It tackled accelerating the pace of economically feasible opportunities under the umbrella of the industrial sector in the participating countries.

The meeting also focused on the importance of the private sector’s participation and its key role in activating this industrial partnership that focuses on five sectors: agriculture and food, fertilizers, pharmaceuticals, textiles, minerals, and petrochemicals.

Gamea underscored the importance of the industrial partnership in addressing the economic consequences of global crises and highlighted the importance of the private sector’s engagement in sustainable development for the Arab World.

“This partnership is key to ensuring value and supply chains, reaching industrial self-sufficiency, and creating more jobs,” said Gamea, who welcomed Bahrain to join this partnership, “which will help maximize the benefit of the industrial capabilities of the four countries.”

“To make use of this initiative, partners will exchange science and technology expertise, set up industrial partnerships, and take advantage of the partners’ markets to promote multilateral trade.”

She stressed that her country is keen to do what it takes to support this partnership and pave its way to achieve its targets.

Jaber, for his part, said the UAE underscored its commitment to the partnership by allocating 10 billion investment in the projects it will yield and is managed by ADQ Holding.

“We welcome Bahrain as a vital and dynamic addition to the partnership,” he said, noting that the kingdom’s industrial sector plays a crucial role in sustainable economic development.

He called on companies to leverage the competitive advantages and opportunities for partnership available in each of the participating nations and to conduct their own feasibility studies to maximize their projects’ chances of success.

“As government agencies, we must identify the key enablers these projects require to succeed and do everything in our power to help companies overcome potential obstacles,” he remarked.

This combination of government support with private sector commitment will help the partnership achieve maximum sustainable economic and social benefits, Jaber added.

Shamali said Jordan is keen to support all aspects of joint Arab work, adding that the meeting shows how the leaders of the three countries share a common vision about joining efforts to create a comprehensive economic project.

“The meeting highlighted the political and economic ties binding our nations, and ushers in a new era of joint action and effective economic integration with tangible impacts,” the minister stated.

For his part, Zayani said Bahrain has achieved continuous success and growth in the industrial sector over the past decades.

This is a result of the policies adopted by the government since the 1960s that sought to reduce reliance on oil and natural gas, and diversify the industrial sector by setting up factories in the fields, such as aluminum.

It also established new industrial zones and attracted foreign investments by encouraging industrial projects and providing the necessary infrastructure.

In order to advance the industrial sector, Bahrain’s government launched the Industrial Sector Strategy (2022-2026) on December 30 as a pivotal part of the post-pandemic economic recovery plan.

The strategy, according to Zayani, aims to increase the industrial sector's contribution to GDP, increase exports, and provide jobs for citizens.

It is based on adopting the Fourth Industrial Revolution, implementing the concept of a circular carbon economy along with effective environmental and social governance policies, encouraging investment in technological infrastructure and manufacturing automation, and increasing the efficiency of supply chains to build a developed and sustainable industry.

In 2019, UAE, Egypt, Jordan, and Bahrain accounted for 30% of the Middle East and North Africa’s industrial contribution to GDP, totaling $65 billion worth of industrial exports.

The countries’ combined population is 122 million, representing 27% of the MENA region and 49% of the region’s youth population under 24.

The value of foreign direct investment in the UAE, Egypt and Jordan reached $151 billion between 2016-2020, comprising 42% of new foreign direct investment in the Middle East.

The total value of the countries’ exports stood at $433 billion in 2019, while imports amounted to approximately $399 billion.

Adding Bahrain, which has a GDP of $39 billion, will greatly enhance the Partnership and contribute significantly to its results.

The Partnership is expected to increase the GDP of member countries by $809 billion by unlocking billions worth of opportunities across sectors, including $1.7 billion in the food and agricultural sector, $4 billion in the minerals sector, $1.7 billion in chemicals and plastics, and $0.5 billion in medical products.



IMF Cuts 2026 Euro Zone Growth Forecast with Higher Inflation

FILE PHOTO: Dark clouds are seen over the building of the European Central Bank (ECB) in Frankfurt, Germany, June 6, 2024. REUTERS/Wolfgang Rattay/File Photo
FILE PHOTO: Dark clouds are seen over the building of the European Central Bank (ECB) in Frankfurt, Germany, June 6, 2024. REUTERS/Wolfgang Rattay/File Photo
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IMF Cuts 2026 Euro Zone Growth Forecast with Higher Inflation

FILE PHOTO: Dark clouds are seen over the building of the European Central Bank (ECB) in Frankfurt, Germany, June 6, 2024. REUTERS/Wolfgang Rattay/File Photo
FILE PHOTO: Dark clouds are seen over the building of the European Central Bank (ECB) in Frankfurt, Germany, June 6, 2024. REUTERS/Wolfgang Rattay/File Photo

The International Monetary Fund cut its growth forecast for the euro zone on Thursday and raised its expectation for inflation because of the US-Israeli war on Iran, adding that the economic situation could worsen if high energy prices persisted.

In its regular report on the economy of the 21 countries that share the euro currency, the IMF said economic growth this year would be 0.9%, down from ⁠1.1% forecast in ⁠April while inflation would be 2.8%, up from 2.6% forecast in April.

The IMF's had already revised down its euro zone growth forecast in April from its January prediction.

"Following a period of growth at potential and inflation on target, the euro area outlook has weakened," the IMF said in a report presented to ⁠euro zone finance ministers, referring to the war in the Middle East as a "large but temporary adverse supply shock."

"An even more persistent energy shock could raise inflation and inflation expectations further, even as a drop in confidence or financial stress could weaken demand. A resurgence of the conflict in the Middle East or delays in repairing energy infrastructure, intensified hostilities in Ukraine, and further trade policy adjustments pose additional downside risks," Reuters quoted it as saying.

The IMF said the European Central Bank, which earlier on Thursday raised interest rates for ⁠the first ⁠time in nearly three years, was likely to raise rates again for a cumulative 50 basis points increase in 2026, with a third rate rise also possible.

The IMF warned euro zone finance ministers against rushing to cushion their economies against the impact of high energy costs. "Broad-based fiscal support is not warranted," it said.

Many euro zone members had already introduced measures, averaging around 0.1 percent of GDP across the EU on a GDP-weighted basis as of May 2026.

It said, despite their limited scale so far, the measures likely blunted incentives for energy conservation and that future measures should targeted more to protect vulnerable households.


Egypt Signs Deal to Transfer Shares in Wataniya 172 Fuel Stations to Taqa Arabia

Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
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Egypt Signs Deal to Transfer Shares in Wataniya 172 Fuel Stations to Taqa Arabia

Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
Egyptian Prime Minister Mostafa Madbouly. Reuters file photo

Egypt signed an agreement on Thursday with Taqa Arabia to transfer ownership of a stake in 172 state-owned Wataniya fuel stations through a newly established company, Quick Fuel, according to a ⁠cabinet statement.

Under the ⁠agreement, Taqa Arabia will acquire a 10% stake in Quick Fuel and will also have ⁠the option to acquire an additional 15% stake when the company is listed on the Egyptian stock exchange, Reuters reported.

Egypt said last year it would offer stakes in military-owned companies, which included Wataniya Petroleum, through ⁠its ⁠sovereign wealth fund.

The IMF has made increasing the role of the private sector in the economy a requirement for Egypt's $8 billion loan program.


Hormuz Shock Hits Gulf Economies, Saudi Arabia Takes Center Stage in 2026

 In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
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Hormuz Shock Hits Gulf Economies, Saudi Arabia Takes Center Stage in 2026

 In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /

The global economy is entering an extremely sensitive phase in 2026 amid escalating geopolitical tensions in the Middle East, which have cast a heavy shadow over the fragile global recovery and reshaped the global credit and financial landscape.

At the heart of these turbulent developments, Gulf Cooperation Council economies find themselves directly confronting the fallout from disruptions in energy markets and supply chains resulting from the effective closure of the Strait of Hormuz, according to the World Bank. While this shock has placed the region’s growth under severe pressure, pushing overall growth rates toward near-zero levels, Saudi Arabia has emerged as the strongest expected economic performer among its neighbors, supported by financial buffers and flexible logistical capabilities that have strengthened its ability to contain the impact of the current crisis.

According to the World Bank Group’s June Global Economic Prospects report, rising inflationary pressures, higher energy prices, and tighter monetary policies are driving global growth to lower levels. These combined factors have led the bank to lower its global growth forecast for 2026 to 2.5 percent, compared with about 2.9 percent in 2025, marking a path below its previous January forecast of 2.6 percent.

The crisis has placed two-thirds of the world’s economies under downward revisions, amid stark warnings of a darker global economic scenario known as “fuel and financing stress,” which could push growth down to 1.3 percent if supply disruptions worsen and are accompanied by acute financial pressures. Estimates point to a partial recovery in 2027 to 2.8 percent, although that would remain below the average of the previous decade.

King Fahd Industrial Port in Yanbu, Saudi Arabia (SPA)

Energy Markets, Inflation, and the Impact of Hormuz

Energy markets are at the center of the crisis, having been directly affected by geopolitical developments, particularly the closure of the Strait of Hormuz, which has led to severe disruptions in global supplies.

The World Bank expects Brent crude to average about $94 per barrel in 2026, representing an increase of roughly 36 percent compared with 2025, provided disruptions subside by July.

The repercussions are not limited to oil. Fertilizer prices are also expected to rise, increasing pressure on global food prices and pushing global inflation to around 4 percent, compared with 3.3 percent in 2025, with the possibility of reaching 4.4 percent under the worst-case scenario.

Gulf and Middle East Economies on the Front Line

Saudi Arabia’s economic leadership in the latest June update was not unexpected. Figures published in the World Bank’s April report indicate that the Kingdom has not only succeeded in building solid “economic buffers” but has also turned current geopolitical challenges into an opportunity to accelerate structural adjustment, reflected in growth of 3.1 percent.

The updated estimates and figures released today reinforce that outlook and underscore this structural advantage. The World Bank revealed figures reflecting the depth of the regional shock as follows:

  • Middle East and North Africa growth declines: The bank expects overall growth in the region to fall sharply (excluding Iran due to exceptional uncertainty) to just 1.6 percent in 2026, compared with about 4 percent in 2025, representing a severe downward revision of 2.7 percentage points from last January’s forecast.
     
  • Near paralysis across Gulf and regional economies: Perhaps the bleakest indicator in the June report is the decline in overall growth among oil-exporting economies in the Middle East to just 0.3 percent in 2026, a downward revision of 4.3 percentage points from January’s forecast. This reflects disruptions to production and export lines. The figure marks a significant deepening of the shock compared with the bank’s April report, which had lowered regional growth forecasts at the time to 1.3 percent from an earlier projection of 4.4 percent. Current estimates show Gulf economies collectively slowing from 3.9 percent growth in 2025 to levels that constrain economic activity and approach zero in 2026, before rebounding toward recovery at around 5 percent in 2027 and 2028, driven by a recovery in trade flows and the launch of reconstruction projects.

Vessels are anchored in the Strait of Hormuz, as seen from Musandam, Oman, June 10, 2026. REUTERS/Stringer

The Geopolitical Structure Behind Diverging Performance

The World Bank attributed the sharp divergence in performance among Middle Eastern oil exporters to varying degrees of exposure to military activity and differences in policy buffers. The report noted that the slowdown would be less severe in Saudi Arabia due to its strategic ability to reroute oil exports away from logistical disruption through the East-West Pipeline leading to the Red Sea.

In a related context, the bank expects a more moderating slowdown in Oman, as it faces lower direct risks because its main ports lie outside the closed Strait of Hormuz. By contrast, the report links the sharp contraction in the economies of Kuwait, Qatar, and Iraq to a forced decline in oil production resulting from damage to energy infrastructure and the suspension of shipping through the strait, alongside surging shipping costs and rising defense and military spending pressures on government budgets.

Performance Across Gulf States

The updated estimates reinforce the figures anticipated by the World Bank in its April report regarding the performance gap among countries in the region as follows:

  • Saudi Arabia: Despite the World Bank deepening its downward revisions for the region as a whole in June to 1.6 percent due to the Hormuz shock, the Kingdom maintained its position as the region’s top performer. Growth is expected to reach 3.1 percent in 2026, down 1.2 percentage points from January estimates because of energy market conditions, before rebounding strongly to 4.9 percent in 2027.
     
  • United Arab Emirates: Growth expectations have been revised down by 2.7 percentage points since January. Growth is now expected to slow from 5 percent in 2025 to 2.4 percent in 2026, before rising again to 4.1 percent in 2027.
     
  • Qatar: Growth expectations for the Qatari economy have fallen sharply by 11.0 percentage points since January. The economy is now expected to contract by 5.7 percent, compared with previously projected positive growth of 5.3 percent, due to severe damage to liquefied natural gas supplies. Qatar is a key player in the global energy market, accounting for between 20 percent and 21 percent of global LNG supplies. The World Bank expects Qatari growth to rebound to 5.7 percent.
     
  • Kuwait: The economy is expected to contract by 6.4 percent, compared with a growth forecast of 2.6 percent in January. Kuwait relies entirely on the Strait of Hormuz to export its crude oil and petroleum products. The closure of the strait therefore means a complete shutdown of the country’s financial lifeline, immediately halting budget revenue inflows. The World Bank expects Kuwait’s economic growth to surge to 13.5 percent in 2027.
     
  • Bahrain: Growth expectations have been revised down by 1.8 percentage points since January. Growth is now expected to slow from 3.1 percent in 2025 to 1.3 percent in 2026 before rising again to 2.8 percent in 2027.
     
  • Oman: Growth expectations for Oman’s economy have been revised down by 1.2 percentage points since January. Growth is now expected to slow from 3.6 percent in 2025 to 2.4 percent in 2026 before increasing to 3 percent in 2027.

Perhaps the greatest shock lies in the freefall of the Iraqi economy, with growth expectations plunging from 6.5 percent to a steep contraction of 8.9 percent.

Egypt Defies the Downward Trend

In contrast to the sharp contraction affecting the budgets of oil-producing Gulf states, the World Bank raised its forecast for Egypt’s economic growth by 0.3 percentage points to 4.6 percent in 2026, before easing to 4 percent in 2027.

This relative recovery is attributed to Egypt’s logistical and geographic advantages, as a significant share of international trade and supply chains shifts toward alternative routes through the Red Sea and the Suez Canal to avoid disruption caused by the closure of the Strait of Hormuz. The diversity of Egypt’s economy and its lack of direct dependence on Gulf oil exports have also helped shield it from the immediate shock, alongside recent inflows of foreign direct investment and international support packages that have provided strong foreign-currency liquidity and enhanced the resilience of non-oil activity and domestic demand against geopolitical headwinds.

Diverging Outlooks

At the regional level, the data show varying performance across global regions. South Asia remains the fastest-growing region despite slowing to 6.3 percent, while growth in East Asia is projected at 4.2 percent and Sub-Saharan Africa at 4 percent.

Latin America is expected to grow by 2.2 percent, followed by Europe and Central Asia at 2.1 percent. Meanwhile, the Middle East and North Africa region is more heavily affected by the conflict, with growth slowing to 1.6 percent in 2026 before recovering to 5 percent in 2027.

Commenting on these difficult developments, World Bank Group President Ajay Banga said the greatest challenge facing governments today is achieving a careful balance between protecting current financial stability and preserving future growth opportunities.

Banga said the World Bank is working intensively to support affected countries through liquidity tools and emergency financing, while remaining fully prepared to provide additional support packages should the crisis worsen, with the aim of helping economies overcome the structural shock to energy markets and strengthen their capacity for sustainable recovery.