World Bank Revises Middle East Growth Forecast to 2.8%, Iran Faces Economic Contraction
The World Bank raised its 2025 growth forecast for the Middle East to 2.8%, citing resilience in non-oil sectors, while warning of an economic contraction in Iran due to sanctions and inflation.
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The World Bank has revised its growth outlook for the Middle East and North Africa (MENA) region, projecting a 2.8% expansion in 2025. The updated forecast reflects resilience across oil-importing economies and recovering non-oil sectors, even as regional challenges persist.
However, the report highlights an economic contraction in Iran, driven by international sanctions, inflationary pressures, and reduced oil exports. Weaker performance in Iran is expected to weigh on regional growth momentum, though gains in Gulf Cooperation Council (GCC) nations like Saudi Arabia and the UAE may help offset some of the slowdown.
The World Bank noted that sustained fiscal discipline, diversification of energy-dependent economies, and increased private sector participation remain key to long-term growth. It also emphasized the importance of geopolitical stability for maintaining investor confidence in the region.
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