meed-logo

line1 line2 line3
SIGN IN / REGISTER

​IMF downgrades Mena growth forecast

1 February 2024

The Washington-based IMF has revised down the expected real GDP growth figure for the Middle East and North Africa region for 2024 to 2.9%, down from the previous projection of 3.4% in its October economic outlook.

The downgraded growth forecast reflects, among other things, the deepening of the voluntary oil production cuts as part of a further Opec+ agreement in November, as well as the heightened instability in the region as a result of the war in Gaza and the Red Sea crisis.

The most recent agreement among the Opec+ members saw half a dozen countries agree to additional voluntary production cuts through to the end of Q1 2024 – in addition to the voluntary cuts announced in April 2023 and extended until the end of 2024.

The regional oil producers that agreed to these additional cuts were Saudi Arabia, Iraq, the UAE, Kuwait, Algeria and Oman, with the six countries collectively accounting for a 1.6 million barrel a day reduction in oil output, led by Riyadh, which alone cut 1 million b/d.

In the same update, the IMF revised down Saudi Arabia’s real GDP growth forecast for 2024 to 2.7%, down from a previous projection of 4.0% in its October economic outlook.

A week ago, the fund’s concluding statement to its Article IV consultation with Oman also saw it lower the growth forecast for that country to 1.4%, down from a previous forecast of 2.7% growth.

Both revisions reflect the country-level economic impact of these additional voluntary cuts, which will have an even greater impact on the fiscal side, cutting into government revenues and possibly spending.

Geopolitical impacts

The other major influence on the regional economy in the past three months has been the eruption of the war in Gaza and the Red Sea shipping crisis.

These twin events have had considerable impact on the most adjacent geographies, with the war in Gaza affecting economies across the Levant, as well as regional tourism, and the Red Sea crisis hitting trade.

In mid-December, a study commissioned by the UN Development Programme (UNDP) estimated that the economic cost of the war in Gaza on neighbouring Egypt, Jordan and Lebanon was set to exceed $10bn in 2023 alone and had the potential to push 230,000 more people into poverty.

It noted that the conflict was impacting consumption and trade and exacerbating the existing weak growth, high unemployment and fiscal pressure in the three countries.

Egypt has been acutely affected by both the impact on tourism and the fall in receipts from the passage of ships transiting through the Suez Canal – both major sources of revenue for the Egyptian government.

On 26 January, the UN Conference on Trade and Development (UNCTAD) estimated that weekly transits through the Suez Canal had fallen by 42% over the past two months, and that container ship transits specifically had plummeted by 67% as compared to one year previously.

However, the largest impact has been on liquefied natural gas (LNG) carriers, which have stopped altogether since 16 January, according to Jan Hoffmann, trade logistics chief at UNCTAD.

Cross-sector impacts

Tourism has also been severely impacted since the commencement of hostilities in October, with the significant tourism markets of Egypt and Jordan being subject to mass flight and hotel cancellations. For Lebanon, the regional economic crisis has merely compounded the already dire domestic economy crisis.

In the IMF’s January briefing, research department division chief Daniel Leigh noted that for Egypt, “despite strong tourism performance overall in 2023, there’s been a slowdown since the start of the conflict in Gaza, in Israel, with hotel bookings clearly coming down.

“Now, on top of that, there’s the escalation and the Red Sea attacks, which may impact, and are impacting, foreign exchange inflows. That’s about $700m a month, a very important source of foreign currency for Egypt.”

Leigh said the uncertainty of the situation was already impacting investment prospects, creating an even more urgent need for additional financing to enable reforms and bring inflation down to restore growth.

The IMF is currently in discussions with Cairo over the provision of additional financing to the Egyptian government in the form of an Extended Fund Facility (EFF) from the fund alongside a reform programme.

More broadly, the IMF has assessed that the shockwaves from the war in Gaza have already caused current accounts across the region to deteriorate and given rise to $30bn in additional financing needs among Arab states outside of the Gulf, with further fallout expected if the conflict drags on.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11480373/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Algeria opens bidding for water treatment plant

    15 April 2026

     

    State-owned Cosider Pipelines, part of Algeria’s public infrastructure group Cosider, has issued a tender for the construction of a demineralisation plant in In Salah in Algeria.

    The contract covers the design, supply, installation, testing and commissioning of a plant with a treatment capacity of 62,000 cubic metres a day (cm/d).

    The tender is open to local and international companies specialising in the design and construction of demineralisation and reverse osmosis desalination plants.

    The bid submission deadline is 26 April.

    The project will be located at In Salah, a key industrial area in southern Algeria, where treated water supply is important for both municipal and industrial use.

    Cosider said that individual bidders must demonstrate that they have completed at least one reverse osmosis demineralisation or desalination plant with a capacity of 20,000 cubic metres a day or more.

    They must also show an average annual turnover of at least AD1bn ($7.7m) for their five best years over the past decade.

    For consortium bids, all partners must share full responsibility for the contract, while the lead company must meet the technical and financial requirements.

    Recent projects

    In 2023, MEED reported that Riyadh-based water utility developer Wetico had won two contracts to develop water desalination plants in Algeria.

    Societe Algerienne de Realisation de Projects Industriels (Sarpi) awarded the contract for the El-Tarf desalination plant, while Entreprise Nationale de Canalisations (Enac) is the client for the Bejaja facility.

    Both plants were commissioned in 2025, each with a production capacity of 300,000 cm/d.

    Separately, Wetico was the main contractor on a third plant commissioned last year. The Cap Dijinet 2 seawater desalination plant in Boumerdes province covers 18 hectares and also has a capacity of 300,000 cm/d.

    Like many countries, Algeria is facing pressure on resources due to longer and more frequent droughts. Seawater desalination is seen as a key driver of the government’s strategy to guarantee drinking water supply.

    According to previous reports, the government is planning to build up to six additional plants by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16404325/main.jpg
    Mark Dowdall
  • WEBINAR: UAE Projects Market 2026

    15 April 2026

    Webinar: UAE Projects Market 2026
    Tuesday, 28 April 2026 | 11:00 GST  |  Register now

    Agenda:

    • Overview of the UAE projects market landscape
    • 2025 projects market performance
    • Value of work awarded 2026 YTD
    • Impact of the Iran conflict on the projects market and real estate, assessing supply chain disruptions, material cost inflation and war risk premiums
    • Key drivers, challenges and opportunities
    • Size of future pipeline by sector and status
    • Ranking of the top contractors and clients
    • Summary of key current and future projects
    • Short and long-term market outlook
    • Audience Q&A

    Hosted by: Colin Foreman, editor of MEED 

    Colin Foreman is editor and a specialist construction journalist for news and analysis on MEED.com and the MEED Business Review magazine. He has been reporting on the region since 2003, specialising in the construction sector and its impact on the broader economy. He has reported exclusively on a wide range of projects across the region including Dubai Metro, the Burj Khalifa, Jeddah Airport, Doha Metro, Hamad International airport and Yas Island. Before joining MEED, Colin reported on the construction sector in Hong Kong.

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401868/main.gif
    Colin Foreman
  • Saudi Landbridge finds its moment in Gulf turmoil

    15 April 2026

    Commentary
    Yasir Iqbal
    Construction writer

    The strategic case for the Saudi Landbridge has never been more urgent. SAR’s appointment of Spain’s Typsa as lead design consultant, reported by MEED this week, is more than a procurement milestone. After two decades of delays, it reflects how the long-deferred project has become a strategic necessity.

    The conflict reshaping the Middle East has made that necessity more immediate. Red Sea transits are costly and unpredictable. The Strait of Hormuz carries risk no insurer can fully price. Saudi Arabia’s most valuable exports, including crude oil, refined products, petrochemicals and industrial goods, move almost entirely by sea through routes that are no longer reliably secure.

    The kingdom sits between two coastlines with no rail link connecting them. That gap is now an economic exposure.

    The $27bn project addresses it directly. More than 1,500 kilometres of track, anchored by a 900km railway between Riyadh and Jeddah, will provide direct freight access from King Abdullah Port on the Red Sea, with upgrades to the Riyadh-Dammam line and a new connection to Yanbu.

    Together, they create what Saudi Arabia has never had: a continuous land corridor linking Gulf industrial ports to Red Sea export terminals, entirely within its own borders.

    The commercial implications are substantial. Aramco’s downstream output, Sabic’s chemicals, and the manufacturing clusters of Jubail and Yanbu gain flexible access to both coasts.

    Exporters targeting Europe and the Americas load at Jeddah; those serving Asia pivot east to Dammam by rail, on demand, without Hormuz risk or Red Sea freight surcharges.

    No neighbouring economy has that optionality. The network also underpins a broader economic ambition. Connecting Jeddah, Riyadh, Dammam, Jubail, Yanbu, King Abdullah port and King Khalid airport by rail positions the kingdom as a genuine logistics corridor between East and West. 

    With design now under way and construction tenders expected imminently, the Landbridge is closer to reality than at any point in its troubled history. Regional disruption did not create this project. But it has made the argument for it unanswerable.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401567/main.png
    Yasir Iqbal
  • Indian firm selected for Saudi sewage treatment project

    15 April 2026

     

    Saudi Arabia’s National Water Company is understood to have recently selected Indian contractor VA Tech Wabag as its preferred bidder for a contract to expand a sewage treatment plant (STP) in Al-Majmaah in Riyadh Province.

    The engineering, procurement and construction (EPC) package for the Al-Majmaah STP has an estimated value of $65m.

    The scope includes the construction of sewage treatment plant units, a pumping station and an effluent surplus line. It also covers the installation of a Scada system, supervisory control systems and associated facilities.

    As MEED understands, six bids were submitted last year, including from local firms Alkhorayef Water & Power Technologies, Al-Rafia Contracting, Civil Works Company, Saudi Sdn Water & Energy and Washnah Trading & Contracting.

    The project forms part of Saudi Arabia’s broader push to expand treatment and reuse infrastructure under Vision 2030, particularly across the Riyadh region.

    MEED recently revealed that NWC had awarded an EPC contract for the latest phase of its long-term operations and maintenance sewage treatment programme.

    The contract to build and upgrade sewage treatment plants with a combined capacity of about 440,000 cubic metres a day was awarded to a consortium led by China’s Jiangsu United Water Technology.

    Elsewhere, a joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding and Wabag is awaiting the formal contract award for phase two of Kuwait’s Doha seawater desalination plant project.

    The firms submitted the lowest bid of $373.2m for the project last year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401155/main.jpg
    Mark Dowdall
  • SAR extends phosphate rail track deadline

    15 April 2026

     

    Saudi Arabian Railways (SAR) has extended the bid submission deadline to 26 April for a multibillion-riyal tender to double the tracks on the existing phosphate transport railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the kingdom’s Eastern Province.

    The new tender – covering the second section of the track-doubling works and spanning more than 150 kilometres (km) – was issued on 9 February. The previous bid submission deadline was 15 April.

    The new tender follows SAR receiving bids from contractors on 1 February for the project’s first phase, which spans about 100km from the AZ1/Nariyah Yard to Ras Al-Khair.

    The scope includes track doubling, alignment modifications, new utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track. It also includes support for signalling and telecommunications systems.

    The tender notice was issued in late November, with a bid submission deadline of 20 January 2026.

    Switzerland-based engineering firm ARX is the project consultant.

    MEED understands that these two packages are the first of four that SAR is expected to tender for the phosphate railway line. Other packages expected to be tendered shortly include the depot and systems packages.

    In 2023, MEED reported that SAR was planning two projects to increase its freight capacity, including an estimated SR4.2bn ($1.1bn) project to install a second track along the North Train Freight Line and construct three new freight yards.

    Formerly known as the North-South Railway, the North Train is a 1,550km-long freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. There, it diverges into a line southward to Riyadh and a second line running east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.

    Adding a second track and the freight yards will significantly increase the network’s cargo-carrying capacity and facilitate increased industrial production. Project implementation is expected to take four years.

    State-owned SAR is also considering increasing the localisation of railway materials and equipment, including the construction of a cement sleeper manufacturing facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16400986/main.jpg
    Yasir Iqbal