Amna Puri-Mirza
Research Expert covering the Middle East
Middle East and North Africa Economic Outlook 2024 - Statistics & Facts
While oil production and high inflation rates both influence the 2024 economic outlook for the Middle East and North African region, the ongoing conflict in Gaza has immediately affected the current situation. Due to safety and security concerns brought about by the conflict, tourism activities are declining, and trade routes through the Red Sea are being rerouted. Furthermore, business corporations associated with the conflict are experiencing widespread boycotts, with shifts in consumer behavior emerging. The current situation affects the region's political risk assessment, which influences foreign trade and investments. Although the overall inflation rate in the MENA region is projected to reduce in 2024, it is still a major hurdle to overcome for some MENA countries with high debts and inflation rates.
Besides those above mentioned current economic obstacles, there are also long term structural challenges, governments of the MENA region try to address. These are the leading missions:
Labor market of the MENA region
A leading factor in the MENA economic outlook is the development of the labor market. Currently, the entire region faces similar challenges of a low female participation rate in the workforce, a high youth unemployment rate, and, especially in the Gulf Cooperation Council (GCC) region, a low employment rate of GCC nationals in the private and services sectors. Long-term reform policies have been implemented to address these issues, particularly in the GCC region.Economic diversification
The OPEC countries' announcement to reduce oil production in 2024 will substantially impact the region, particularly within the GCC countries. The oil industry is a leading GDP generator in those economies, despite many GCC governments trying to move away from oil dependency and towards economic diversification. Another motivation for Saudi Arabia and the United Arab Emirates to reduce their oil output is to reach their climate target of net-zero emissions before 2060.
