meed-logo

line1 line2 line3
SIGN IN / REGISTER

UAE maintains regional economic edge

14 January 2025

 

Heading into 2025, the UAE and Saudi Arabia continue to maintain their significant lead in the MEED Economic Activity Index. These opportune markets sit alongside three of their GCC peers – Oman, Qatar and Kuwait – as economies whose real GDP is supported by relatively robust hydrocarbon revenues. 

In 2025, the GCC economies are forecast to grow by an unweighted real GDP growth rate average of 3.3%, compared to just 1.4% in 2024, according to the latest IMF estimates. Across the countries featured in the index, the figure for 2025 was 3.2%, compared to 1.8% in 2024.

One significant reason for this uptick is the subsiding of the Red Sea shipping disruption. Risks remain, but a year of intensive maritime patrols by several international naval coalitions has reduced the risk to commercial vessels. The shipping route has not seen a sinking since the first half of 2024, and there has not been a serious incident involving a Houthi strike on a vessel since September.

At the same time, logistical workarounds by the commercial transport sector have mitigated the disruption and overall risk to regional trade activity.

In terms of the hydrocarbons sector, the IMF expects the average price of oil to be $72.84 a barrel in 2025, compared to $81.29 a barrel in 2024. Alongside continuing Opec+ restrictions on oil production, this points to a slight weakening of oil revenues this year. Government spending plans among the region’s oil exporters are unlikely to be duly affected in the short term however, as such variables have already been factored into near-term expenditures.

Strong lead

The UAE tops the January 2025 MEED Economic Activity Index, with a forecast real GDP growth rate of 4.5%, broad fiscal surplus and strong non-oil growth backed by the ongoing strengthening of its projects market, which saw the award of $82bn-worth of contracts in 2024. This value exceeded project completions in the market in 2024 by almost $50bn and sits well above the long-term average.

Looking ahead, there are projects worth an estimated $8bn in the bidding phase.

Saudi Arabia’s real GDP is projected to grow by a similarly buoyant 4.6% in 2025. Although the kingdom is expected to run a fiscal deficit this year, this is largely a function of the government’s expansionary spending on strategic projects and development programmes.

Riyadh’s project spending hit new heights in 2024, with contract awards reaching a record value of $142bn and exceeding the value of project completions in the market by almost $90bn. The country also has an extraordinary $250bn-worth of project value currently under bid.

Moderate activity 

Fellow GCC members Oman, Qatar and Kuwait follow in the index in a tight cluster, supported by real GDP forecasts in the 2-3% range, fiscal projections for top-line surpluses and moderate projects market activity.

Oman’s projects market is the most buoyant, with contract awards growing to $11bn in 2024 – double the $5.5bn in completions.

Qatar’s project award activity meanwhile dipped to $16bn in 2024, below the country’s long-term averages, though it still outpaced the $9bn in project completions last year.

Kuwait’s project activity grew from $6.3bn in awards in 2023 to $9bn in 2024, outpacing completions by $3.5bn and broadly matching long-term contract award averages.

All three countries have strong project pipelines, with $15bn-$25bn-worth of tenders each in the bidding phase.

Much improved

Morocco, Algeria and Iraq follow with sharply improved scores compared with mid-2024, in part due to more buoyant economic projections, including real GDP growth forecasts in the 3%-4% range in 2025.

Though weighed upon by serious fiscal imbalances, all three countries have strongly improved project markets, with contract awards surging from $2.4bn to $8bn in Morocco between 2023 and 2024, from $3.7bn to $21bn in Algeria, and from $14bn to $24bn in Iraq. The awards in all three countries also surpassed last year’s project completions and historic award averages.

Market stragglers

Bahrain comes next in the index as the lowest-performing GCC nation for reasons unrelated to its real GDP performance, which sits around 3%, but instead due to its fiscal and project sector weakness.

Manama is overspending, but not on critical infrastructure. The result is a projects sector that saw just $2.6bn-worth of awards in 2024, well below the $7.5bn in completions, which included the end of work on the $4bn Sitra Refinery, and below the $3.8bn long-term average.

The index is rounded out by Jordan, Egypt and Tunisia, whose economic situations are all fragile.

Jordan has a 2.5% growth projection, but high fiscal imbalance and unemployment. Subdued project activity in the country barely recovered to long-term averages in 2024 – after a dismal performance in 2023 – due to a $1bn liquefied natural gas terminal contract award.

Egypt, while projected for 4.1% growth in 2025, is grappling with 30% inflation, a deep fiscal deficit and a contracting projects sector. There were $19bn of awards in 2024, falling below both the 2023 figure and the long-term average for the market.

Tunisia, with a growth projection of just 1.6%, is failing across most metrics as it continues to grapple with a political and economic crisis. The country’s projects activity is no exception, with the value of contract awards in 2024 falling below 25% of the long-term average.

ABOUT THE INDEX

MEED’s Economic Activity Index, first published in June 2020, combines macroeconomic, fiscal, social and risk factors alongside data from regional projects tracker MEED Projects on the project landscape, to provide an indication of the near-term economic potential of Middle East and North African markets.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/13246496/main.gif
John Bambridge

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

Click here to register
Exclusive from Meed
Related Articles
  • Qiddiya receives high-speed rail PPP prequalifications

    1 May 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company (QIC) and the National Centre for Privatisation & PPP, received prequalification statements from firms on 30 April for the public-private partnership (PPP) package of the Qiddiya high-speed rail project in Riyadh.

    This follows the submission of prequalification statements for the engineering, procurement, construction and financing (EPCF) package on 16 April, as reported by MEED.

    The prequalification notice was issued on 19 January, and a project briefing session was held on 23 February at Qiddiya Entertainment City.

    The Qiddiya high-speed rail project, also known as Q-Express, will connect King Salman International airport and the King Abdullah Financial District (KAFD) with Qiddiya City. The line will operate at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.

    The line is expected to be developed in two phases. The first phase will connect Qiddiya with KAFD and King Khalid International airport.

    The second phase will start from a development known as the North Pole and travel to the New Murabba development, King Salman Park, central Riyadh and Industrial City in the south of the city.

    In November last year, MEED reported that more than 145 local and international companies had expressed interest in developing the project, including 68 contracting companies, 23 design and project management consultants, 16 investment firms, 12 rail operators, 10 rolling stock providers and 16 other services firms.

    In November 2023, MEED reported that French consultant Egis had been appointed as the technical adviser for the project. UK-based consultancy Ernst & Young is acting as the transaction adviser, and Ashurst is the legal adviser.

    Qiddiya is one of Saudi Arabia’s five official gigaprojects and covers a total area of 376 square kilometres (sq km), with 223 sq km of developed land. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16641057/main.gif
    Yasir Iqbal
  • Saudi Arabia launches $2bn Jawharat Al-Arous project

    1 May 2026

    Saudi Arabia has launched Jawharat Al-Arous, an SR8bn ($2bn) private-sector-led residential development in north Jeddah.

    The scheme covers 107 million square metres and comprises 18 residential neighbourhoods planned to accommodate more than 700,000 residents. It will provide more than 80,000 residential and commercial plots.

    The masterplan also includes 41 government-backed infrastructure and service zones to support large-scale urban expansion.

    The project was unveiled by Mecca Region Governor Khalid Al-Faisal and will be overseen by Saud Bin Mishaal Bin Abdulaziz.

    According to a recent report by real estate firm Cavendish Maxwell, Jeddah’s residential stock stood at about 1.09 million units at the end of 2025, following the completion of around 4,000 units that year.

    An expanding pipeline of about 18,000 units in 2026 and 22,000 units in 2027 is expected to bring total stock to around 1.14 million units by 2027, gradually adding supply without destabilising market equilibrium.

    GlobalData expects the Saudi construction industry to grow by 3.6% in real terms in 2026, supported by increased foreign direct investment (FDI) and investment in the housing and manufacturing sectors.

    The residential construction sector is forecast to grow by 3.8% in real terms in 2026 and to record an average annual growth rate of 4.7% between 2027 and 2030, supported by Saudi Vision 2030’s goal of increasing homeownership from 65.4% in 2024 to 70% by 2030, including through the delivery of 600,000 homes by 2030.

    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/16640863/main.png
    Yasir Iqbal
  • Damage to US bases in region expected to cost more than $15bn

    1 May 2026

    The $25bn estimate a Pentagon official gave US lawmakers on 29 April did not include the cost of repairing damage to US bases in the Middle East, and the real cost of the war is likely to be between $40bn and $50bn, according to CNN.

    That would put the cost of repairing bases and replacing destroyed assets at between $15bn and $25bn.

    Jules Hurst III, the Pentagon official serving as the agency’s comptroller, told the House Armed Services Committee that “most” of the $25bn he cited had been spent on munitions. Defence Secretary Pete Hegseth declined to say whether the figure included repairs to damaged US bases.

    Iranian strikes across the Gulf in the early days of the war significantly damaged at least nine US military sites in 48 hours, hitting facilities in Bahrain, Kuwait, Iraq, the UAE and Qatar.

    Six US servicemembers were killed in an attack on a command post in Kuwait, and 20 more were injured.

    Three sources told CNN that the figure provided to the House Armed Services Committee did not include the cost of rebuilding US military installations and replacing destroyed assets.

    One source said the true cost would likely be between $40bn and $50bn.

    US contractors such as KBR and Fluor, as well as local firms, are likely to be among the leading contenders for contracts to repair and rebuild US bases in the region.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16638663/main.gif
    Wil Crisp
  • Morocco seeks financing for $25bn gas pipeline

    1 May 2026

    Register for MEED’s 14-day trial access 

    Morocco’s state-owned agency for oil, gas and mineral resources is preparing to launch a fundraising campaign for its planned $25bn gas pipeline to transport West African gas to the Mediterranean coast, according to officials.

    This will be the first time the Office National Des Hydrocarbures & Des Mines (Onhym) has sought to raise capital since it was restructured as a joint-stock company in February.

    The restructuring was implemented to try to bolster the agency’s “capacity to structure partnerships, mobilise diversified funding and support large-scale projects”, according to a company statement.

    Under current plans, the proposed gas pipeline will extend for 6,900 kilometres, including onshore and offshore segments.

    The Nigeria-Morocco Gas Pipeline (NMGP) will link gas deposits in Nigeria, Senegal and Mauritania to 10 neighbouring African nations.

    According to the plan, the project’s northern terminus will connect to the existing Maghreb-Europe Gas Pipeline, which links Morocco and Spain.

    In its statement, Onhym described the planned pipeline as a “major opportunity” to unlock some of the world’s largest untapped gas reserves, saying it would improve “Euro-African energy security”.

    Last month, Omco, Morocco’s gas-transport firm, said that a final investment decision (FID) for the first phase is expected to be finalised before the end of this year.

    Also last month, Amina Benkhadra, the director-general of Onhym, said that Nigeria and Morocco were planning to sign an intergovernmental agreement to formalise the legal and regulatory framework for the pipeline.

    Benkhadra said that the agreement would establish a “high authority” for the pipeline.

    This body will be based in Nigeria and include ministerial representatives from each participating country to ensure political coordination.

    To navigate global financing challenges and complex cross-border logistics, the project is expected to be developed in stages rather than waiting for a single FID.

    Early phases will link Morocco to gas fields in Mauritania and Senegal, while southern segments will connect Ghana to Cote d’Ivoire and eventually to Nigeria.

    The pipeline is being designed with an annual capacity of 30 billion cubic metres a year, according to officials

    Half of that volume is earmarked for Morocco’s domestic needs and exports to Europe, which has sought to diversify its energy sources following geopolitical disruptions.

    To manage construction, a joint-venture project company will be formed between Onhym and the Nigerian National Petroleum Company.

    Feasibility studies for the pipeline were completed last year.

    Onhym awarded UK-based Penspen the phase 1 front-end engineering and design (feed) contract for the project in 2019.

    Then, in 2022, Onhym awarded Australia’s Worley the phase 2 feed contract.

    At the time, Worley said that the overall feed services would be managed by Intecsea, its offshore engineering consultancy business headquartered in the Netherlands.

    It also said that Advisian, its global consulting business, will provide research connected to the acceleration of electrification and the feasibility of energy self-sufficiency in the region.

    Its UK and Madrid offices would analyse the possibility of using renewable energy resources to power the pipeline.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16635907/main.jpg
    Wil Crisp
  • Read the May 2026 MEED Business Review

    30 April 2026

    Download / Subscribe / 14-day trial access

    The regional war – and resulting disruption to oil and gas shipping – has triggered a major global energy security shock that is likely to recalibrate long-term decisions on how energy is produced and consumed.

    The effective closure of the Strait of Hormuz is exposing the vulnerability of Middle East supply chains and pushing import-dependent countries to strengthen energy security by expanding domestic fossil fuels, speeding up nuclear projects, and investing in renewables and storage.

    At the same time, higher prices are encouraging producers unencumbered by reliance on the Strait to boost output.

    Like the oil shocks of the 1970s, the conflict is likely to have lasting effects, reshaping energy policies and partnerships and accelerating diversification away from existing arrangements. Read more here. 

    The conflict is also undermining the business case for Middle East liquefied natural gas (LNG) projects, as prices rise, demand drops and confidence in the reliability of the region’s suppliers is eroded. 

    May’s market focus is on the UAE, where disruption from the Iran war has challenged every assumption behind the country’s non-oil model.

    This edition also includes our industry report on Gulf capital markets, as well as analysis on the region’s initial public offering market.

    In the latest issue, we explore why regional banks are feeling the strain despite strong buffers; consider why force majeure offers no shield against construction breaches; examine the Public Investment Fund’s 2026-30 strategy and talk to Estelle Brachlianoff, CEO of water infrastructure operator Veolia.   

    We hope our valued subscribers enjoy the May 2026 issue of MEED Business Review. 

     

    Must-read sections in the May 2026 issue of MEED Business Review include:

    > AGENDA: War in the Middle East recalibrates global energy markets

    > REGIONAL LNG: War undermines business case for Middle East LNG

    INDUSTRY REPORT:
    Gulf capital markets
    > Damage avoidance frames debt issuance
    > Regional IPO market dries up amid war

    > INTERVIEW: Desalination holds steady amid tensions, says Veolia CEO

    > LEGAL: Force majeure will not cure pre-existing construction industry breaches  

    > BANKS: GCC banks to feel the strain despite strong buffers

    > PIF STRATEGY: Public Investment Fund approves 2026-30 strategy

    > UAE MARKET FOCUS: 
    > COMMENT: Conflict tests UAE diversification
    > GVT &: ECONOMY: UAE economy absorbs multi-sector shock
    > BANKING: UAE banks ready to weather the storm
    > ATTACKS: UAE counts energy infrastructure costs
    > UPSTREAM: Adnoc builds long-term oil and gas production potential
    > DOWNSTREAM: Adnoc Gas to rally UAE downstream project spending
    > POWER: Large-scale IPPs drive UAE power market
    > WATER: UAE water investment broadens beyond desalination
    > CONSTRUCTION: War casts shadow over UAE construction boom
    > TRANSPORT: UAE rail momentum grows as trade routes face strain
    > DATABANK: UAE GDP projection corrects on conflict

    > MEED COMMENTS: 
    >     War takes a rising toll on Kuwait’s oil sector
    > Libya budget approval could lead to surge in oil and gas projects
    > Masdar’s move abroad will not be the last
    > Saudi Landbridge finds its moment in Gulf turmoil

    > GULF PROJECTS INDEX: Gulf index plateaus despite ceasefire

    > MARCH 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The road to hell is paved with gold

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16623768/main.gif
    MEED Editorial