The Mastercard Economics Institute has published its Economic Outlook 2026, offering a detailed view of the trends expected to shape the coming year. The report suggests that while global GDP growth is forecast to moderate to 3.1%, the MENA region will outperform with expected growth of 3.6%, supported by fiscal expansion, digital transformation, and major structural reforms across key economies.
Qatar is projected to lead regional growth at 4.9% due to rising LNG output, followed by Egypt at 4.4%. The UAE and Saudi Arabia are expected to grow by 4.3% and 3.6% respectively, with non-oil sectors in both countries approaching 5% growth as diversification efforts accelerate. Pakistan is forecast to expand by 3.6%, while Oman, Bahrain, and Kuwait are projected at 3.3%, 3.1%, and 2.5%. Resilient consumer spending and public sector investment remain core drivers of regional economic momentum. Inflation is expected to stabilize, with GCC economies maintaining levels near 2% and oil-importing countries easing to around 6.7%.
According to Khatija Haque, Chief Economist for EEMEA at the Mastercard Economics Institute, supportive financial conditions and ongoing reforms will stimulate non-oil sectors, reduce borrowing costs, and reinforce consumer confidence across real estate, tourism, and retail. However, geopolitical risks and climate pressures remain potential hurdles.
Key Themes from the Outlook
Investment as a catalyst for diversification
GCC governments continue to deploy significant capital into renewables, construction, and technology—sectors that align with long-term visions such as Saudi Vision 2030. These investments are reshaping global supply chains, attracting talent, and accelerating non-oil growth. Egypt, meanwhile, is drawing notable FDI into renewable energy, including green hydrogen and solar production.
Trade shifts toward emerging markets
MENA’s trade patterns continue to evolve, gradually moving away from traditional advanced economies toward emerging markets across Eastern Europe, the Middle East, and Africa. This shift reflects changing geopolitical dynamics, supply chain diversification, and new regional partnerships.
Digital transformation and AI integration as economic engines
The region is deepening its digital foundations through national AI strategies and large-scale investments in digital infrastructure. The Mastercard Economics Institute expects AI adoption to significantly boost productivity, particularly in markets aggressively pursuing digital transformation such as the UAE and Saudi Arabia.
SMEs expanding through digitalization
Small and medium enterprises remain vital to MENA’s economic fabric. Digital tools are enabling SMEs to streamline operations and compete more effectively. In the UAE, SMEs account for just over 37% of retail spending, with the share of online SME sales rising year-on-year. MEI notes that flexible, tech-forward SMEs will increasingly tap into high-value, specialized service sectors traditionally dominated by larger firms.
Consumers globally are expected to maintain value-oriented consumption patterns, prioritizing experiences such as travel and events while remaining cost-conscious for essential goods.
The Economic Outlook 2026 draws on aggregated and anonymized Mastercard transaction data, public datasets, and MEI’s proprietary modeling to provide high-frequency insights into global and regional economic trends.
