IMF: Middle East Faces Pivotal Economic Moment

Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
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IMF: Middle East Faces Pivotal Economic Moment

Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
Azour speaks during a presentation of the Regional Economic Outlook update (AFP)

The International Monetary Fund said the Middle East, North Africa, and Pakistan were facing a pivotal and exceptionally difficult moment in their modern economic history after the war that broke out on Feb. 28, 2026, describing it as a severe and multifaceted shock to one of the world’s most strategically important economic corridors.

The IMF said the conflict was not merely a border crisis but had disrupted “three pillars of stability, energy markets, trade routes, and business confidence,” triggering a global energy shock and weakening supply chains.

Amid these challenges, Saudi Arabia’s economy emerged as a model of resilience, showing what the IMF described as “exceptional sturdiness” that enabled it to absorb the impact of disruptions to the Strait of Hormuz and a decline in regional output, supported by the pillars of Vision 2030, which strengthened fiscal discipline and logistical flexibility.

Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said while presenting an update of the Regional Economic Outlook in Washington, on the sidelines of the IMF and World Bank Spring Meetings, that the war was reshaping the region’s economic outlook.

At the center of the shock was energy, he said, noting that the Strait of Hormuz, “the world’s most critical energy chokepoint, through which roughly one-fifth of global oil supply and about one-quarter of global LNG trade normally transit,” had come close to a standstill.

He said disruptions and shutdowns had cut oil and gas output across Gulf Cooperation Council countries, pushing Brent crude above $100 a barrel, while “European gas prices rose by roughly 60 percent, exceeding the spike observed after Russia’s invasion of Ukraine,” putting global energy security at risk.

He said energy disruptions caused by the war would weigh heavily on Gulf exporters, while oil-importing countries such as Egypt and Jordan were facing higher commodity prices and weaker remittance flows.

More broadly, the Middle East and North Africa region is expected to see a marked slowdown in growth this year, with real GDP projected at about 1.1%, significantly below pre-war forecasts, before a recovery in 2027, according to the IMF.

Azour said the shock extended beyond oil and gas, noting that “commodity disruptions extend beyond oil and gas,” affecting fertilizers, chemicals, and other products in which the region holds a strategic position.

He warned that rising food costs were directly threatening vulnerable populations, saying that “these price increases translate directly into higher food costs for some of the world’s most vulnerable populations,” particularly in import-dependent economies across the region and beyond.

He added that the conflict had also affected services, saying, “air traffic collapsed at major Gulf hubs, maritime insurance premiums surged, shipping routes lengthened, and logistics chains weakened,” highlighting the broad impact on aviation and logistics.

The IMF said some oil-importing economies in the region relied heavily on Gulf countries for energy imports and financial flows, leaving them exposed if the conflict intensified or persisted.

Saudi experience

Azour said one of the most important lessons from the war and the disruption of the Strait of Hormuz was the need to diversify trade routes.

“This shock underscores the importance of building greater resilience and strengthening integration,” he said, adding that this includes “diversifying trade routes and deepening regional cooperation,” to ensure the continued flow of goods and energy.

He said Saudi Arabia’s approach under its strategic vision went beyond infrastructure development to a broader reshaping of logistics networks. By expanding alternative ports on the Red Sea and strengthening land and rail connectivity, the kingdom reduced its reliance on a single maritime chokepoint.

He said this ability to create parallel trade routes allowed Saudi trade to continue effectively despite disruptions to regional corridors, offering a model for protecting economic security and ensuring uninterrupted supply flows.

Egypt

Azour said economic reforms implemented by Egypt, along with stronger policy buffers, were helping the country better manage external shocks.

He said allowing the exchange rate to become more flexible helped absorb shocks, while higher reserves provided reassurance to markets.

Regional divergence

The IMF report highlighted a sharp divergence across countries. Qatar faced a steep downgrade to growth forecasts due to damage to its gas infrastructure, while Oman showed relative resilience given its geographic position outside the Strait of Hormuz.

At the same time, financing pressures increased on Egypt, Pakistan, and Jordan as sovereign spreads widened, prompting Azour to stress that the IMF stood ready to support countries.

He said that if oil production recovered and the Strait of Hormuz fully reopened, countries would be able to increase output quickly, adding that higher oil prices compared with pre-2026 levels would help producers recover some of their losses from the crisis.



Gulf, UK Officials Press for Action on Free Trade Deal as Investment Opportunities Beckon

The UK-GCC Strategic Dialogue Forum was held in London on Tuesday. (UK-GCC Strategic Dialogue Forum)
The UK-GCC Strategic Dialogue Forum was held in London on Tuesday. (UK-GCC Strategic Dialogue Forum)
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Gulf, UK Officials Press for Action on Free Trade Deal as Investment Opportunities Beckon

The UK-GCC Strategic Dialogue Forum was held in London on Tuesday. (UK-GCC Strategic Dialogue Forum)
The UK-GCC Strategic Dialogue Forum was held in London on Tuesday. (UK-GCC Strategic Dialogue Forum)

Gulf and British officials on Tuesday called for swift action to translate a free trade agreement into tangible investments and economic gains after concluding negotiations, saying closer ties could help both sides navigate mounting challenges to global trade and supply chains.

At the UK-GCC Strategic Dialogue Forum in London, GCC Secretary-General Jasem Mohamed Albudaiwi said the agreement's success would be measured by the joint projects, productive investments and economic opportunities it generates.

He urged business leaders and investors to move beyond the agreement itself and focus on implementation, investment and shared prosperity.

British Minister of State for Trade Anas Sarwar said Britain was working with its Gulf partners to bring the agreement to signing and implementation, but stressed that businesses need not wait for those formalities to expand cooperation.

He urged companies and investors to accelerate existing trade and investment partnerships rather than wait for the signing, legislative procedures and implementation to be completed.

Growing economic partnership

Trade between the GCC and Britain reached about $70 billion in 2025, making the six Gulf states collectively Britain's 10th-largest trading partner, Albudaiwi said.

The combined value of investment assets and liabilities between the two sides stood at around $643 billion in 2024.

Albudaiwi said the figures underscored the strength of Gulf-British economic relations and the scope for further expansion.

With a combined gross domestic product of about $2.4 trillion, the GCC ranks among the world's 10 largest economies, while its foreign trade exceeds $1.8 trillion, he added.

The conclusion of free trade negotiations marked a strategic step toward strengthening those ties by easing trade, encouraging investment and opening new opportunities for private businesses.

Under the agreement, tariffs are expected to be eliminated on more than 99% of GCC exports to Britain, potentially boosting non-oil exports, particularly aluminum, fertilizers and manufactured goods.

Albudaiwi said the deal would also strengthen the Gulf's position as a global logistics hub and help small and medium-sized enterprises expand their operations and access the British market.

But its significance extends beyond trade gains, he said. The agreement could lay the foundation for a long-term economic and investment partnership spanning advanced manufacturing, the digital economy, artificial intelligence, clean energy, sustainability, financial and investment services, education, food security and logistics.

Albudaiwi said cooperation in those sectors could shift Gulf-British relations beyond traditional trade toward deeper economic integration, driven by joint investments, technology and knowledge transfers, and stronger production capabilities.

GCC Secretary-General Jasem Mohamed Albudaiwi addresses the forum. (UK-GCC Strategic Dialogue Forum)

Britain sees Gulf states as strategic economic allies

Sarwar said Britain regarded the GCC states as more than trading markets, describing them as strategic economic allies and friends.

He said choosing the Gulf for his first international visit outside Europe since taking office as trade minister reflected the importance Britain placed on the partnership, particularly amid uncertainty and mounting challenges.

Sarwar stressed the value of solidarity and friendship during difficult times, saying individuals, communities and countries needed to know they could rely on their partners.

He called for a mutually beneficial relationship built on stronger two-way investment and trade, with British companies expanding into Gulf markets and Gulf businesses increasing their presence in Britain.

Opportunities also extended beyond each other's markets to joint investments in third countries, an area Sarwar said offered considerable potential.

He identified aviation and related industries, financial and legal services, defense and security, artificial intelligence, energy, food industries, education and scientific research as sectors with scope for expanded cooperation.

In aviation, Sarwar highlighted Britain's expertise in aircraft manufacturing, engines and security systems, alongside efforts to attract more direct flights from the Gulf to Britain.

He also urged closer cooperation between Gulf and British educational and research institutions, combining Britain's academic and research expertise with Gulf capabilities in energy and investment.

Sarwar said the British prime minister had tasked him with making the United Kingdom the world's most connected economy.

Achieving that goal, he said, would require boosting exports and investment while ensuring the benefits of economic growth reached regions across Britain.

He added that Gulf investment was not confined to London or northern England but extended across different parts of the United Kingdom.

GCC chief negotiator and general coordinator for negotiations Raja Al-Marzouqi delivers his address at the forum. (UK-GCC Strategic Dialogue Forum)

More than 900 meetings over four years

GCC chief negotiator and general coordinator for negotiations Raja Al-Marzouqi said the two sides held more than 900 meetings over four years before reaching the wide-ranging agreement, adding that the negotiations were not easy.

He said the agreement sent a strong message to the international community about the resilience of trade and globalization at a time when the global economy faced challenges affecting the multilateral trading system.

Covering trade in goods and services, investment, rules of origin and digital trade, the agreement is expected to generate economic gains for both sides, according to economic assessments cited by Al-Marzouqi.

Britain's annual economic gains could reach approximately $4.7 billion, while the Gulf states are expected to benefit particularly from services, investment and improved productivity, he remarked.

Al-Marzouqi linked the agreement to the economic transformation underway across the GCC, where governments are seeking to move away from dependence on oil and public spending toward private sector-led growth.

That shift offered British businesses substantial opportunities to participate in projects and investments supporting Gulf economic diversification, he noted.

Gulf and British officials on Tuesday called for swift action to translate a free trade agreement into tangible investments at the UK-GCC Strategic Dialogue Forum in London. (UK-GCC Strategic Dialogue Forum)

From negotiations to results

Kuwait's Minister of State for Economic Affairs and Investment and Acting Minister of Commerce and Industry Abdulaziz Al-Marzooq said the next phase of Gulf-British relations should focus on deeper cooperation in trade, investment, technology, infrastructure, financial services and advanced industries.

He said the GCC offered Britain more than a market, given the Gulf states' established trade links with Asia and Africa.

Al-Marzooq urged both sides to move beyond dialogue and focus on implementation, turning available opportunities into projects, partnerships and measurable economic value.

He said the conclusion of free trade negotiations would give businesses greater certainty and the market access needed to turn investment intentions into action.

While participants agreed on the agreement's strategic importance, their remarks underscored that concluding negotiations was not the end of the process but the beginning of a new phase.

The focus now is on translating the agreement into tangible investments and projects while completing the formal procedures required for signing and implementation.


Saudi Stock Market Falls to Lowest Close Since April 2021

A trader monitors stocks in Saudi Arabia (Reuters)
A trader monitors stocks in Saudi Arabia (Reuters)
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Saudi Stock Market Falls to Lowest Close Since April 2021

A trader monitors stocks in Saudi Arabia (Reuters)
A trader monitors stocks in Saudi Arabia (Reuters)

Saudi Arabia's benchmark Tadawul All Share Index (TASI) ended Tuesday's session down 1.7 percent, shedding 172 points to close at 9,952, its lowest closing level since April 2021, with total trading turnover reaching approximately SAR 3.8 billion.

The index fluctuated between an intraday low of 9,941 points and a high of 10,116 points. Since the beginning of the year, it has lost around 540 points, equivalent to 5.1 percent.

Several heavyweight stocks declined during the session, with Saudi Aramco falling 1 percent to SAR 25.48 and Al Rajhi Bank dropping by the same percentage to SAR 60.15.

Shares of Mobily, BSF and Yamama Cement fell between 1 and 3 percent, while Yansab dropped 7 percent.

SABIC Agri-Nutrients and Bank Albilad each declined 3 percent, closing at SAR 109.80 and SAR 21.47, respectively, following the release of their financial results for the third quarter of 2026.

Tihama led the session's decliners, falling 8 percent, while Azm topped the gainers with a 4 percent increase.


Ferrari: Saudi Arabia Has Become a Key Driver of Our Growth in the Middle East

Ferrari's new showroom in the Saudi capital, Riyadh (Asharq Al-Awsat)
Ferrari's new showroom in the Saudi capital, Riyadh (Asharq Al-Awsat)
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Ferrari: Saudi Arabia Has Become a Key Driver of Our Growth in the Middle East

Ferrari's new showroom in the Saudi capital, Riyadh (Asharq Al-Awsat)
Ferrari's new showroom in the Saudi capital, Riyadh (Asharq Al-Awsat)

Saudi Arabia has emerged as one of the main drivers of Italian luxury sports carmaker Ferrari's growth in the Middle East, fueled by an expanding population of high-net-worth individuals, a new generation of customers and growing interest in luxury sports cars.

Despite accelerating demand across the region, the company remains committed to a strategy centered on limited production and preserving the exclusivity of its brand.

Giorgio Turri, Regional Director of Ferrari Middle East, said Saudi Arabia is no longer simply a market experiencing rising demand, but has become a strategic market for Ferrari's presence, future growth and innovation in the Middle East.

Speaking to Asharq Al-Awsat, Turri explained that the economic and social transformations associated with Saudi Vision 2030 have contributed to a shift in the company's customer demographics, with growing numbers of younger buyers interested in sports cars, vehicle personalization and motorsports.

Riyadh Showroom Reflects Market's Importance

Turri said the opening of Ferrari's new showroom in Riyadh, the first in the Middle East and Asia to adopt the company's new corporate identity, reflects the growing importance of the Saudi market within its regional strategy.

He added that demand in the Kingdom continues on an upward trajectory among both existing and first-time customers.

Ferrari is seeking to broaden its customer base by developing new models, building on the success of vehicles such as the California, Roma and Purosangue, while looking ahead to the introduction of the Luce, its first fully electric vehicle and first five-seat model.

Growth Versus Exclusivity

Despite rising demand, Turri stressed that Ferrari does not pursue higher sales volumes as an end in themselves.

"We" do not seek to increase sales volumes as a goal in itself, he said, explaining that expansion requires carefully balancing market demand with the company's commitment to limited production.

He noted that Ferrari customers in the Middle East are among the youngest worldwide, a trend also evident in Saudi Arabia, where interest in vehicle personalization programs and participation in driving and racing activities is increasing.

Turri said the Kingdom is home to one of the most active Ferrari owners' clubs globally, while Saudi customers demonstrate detailed knowledge of vehicle specifications, technology and performance.

Saudi Arabia, UAE and Qatar Lead Regional Demand

Discussing regional market performance, Turri said economic transformation and growing wealth are supporting long-term demand for luxury vehicles.

He noted that demand is accelerating more rapidly in Saudi Arabia, the United Arab Emirates and Qatar than in other markets across the region.

More than 40 percent of new Ferraris delivered annually in the Middle East go to first-time buyers of the brand, he revealed, while the proportion exceeds 50 percent in the pre-owned vehicle market.

These trends coincide with Ferrari's plan to introduce an average of four new models annually between 2026 and 2030.

Regional Disruptions Force Changes to Shipping Routes

Addressing the impact of recent geopolitical disruptions, Turri said the main effects were felt in supply chains and logistics, after the closure of the Strait of Hormuz forced Ferrari to adjust shipping routes to Gulf markets.

He explained that the company managed the challenges during March and resumed its normal pace of operations in April by rerouting maritime shipments and using air freight when necessary.

Turri confirmed that showrooms and service centers continued operating and that demand had not changed significantly, with the economic and demographic factors supporting the Gulf market remaining intact.

An Ecosystem Beyond Car Sales

Turning to Ferrari's strategy in Saudi Arabia, Turri said the next phase would focus on expanding activities associated with vehicle ownership, including driving programs, racing events and exclusive customer experiences.

He explained that the Jeddah Corniche Circuit has been part of Ferrari's programs since 2023 and is scheduled to host the Ferrari Challenge championship for the first time in February 2027, amid growing participation by Saudi amateur drivers.

Turri also highlighted the company's first customer tour in AlUla in 2025, alongside other events organized during the holy month of Ramadan.

He said these activities have become an integral part of Ferrari's strategy to deepen customers' connection with the brand.

Turri emphasized that Saudi Arabia represents a significant growth opportunity in the coming years, driven not only by increasing demand for sports cars but also by an expanding customer base and growing interest in motorsports across the Kingdom.