The Arab Monetary Fund (AMF) has published the 21st edition of its “Arab Economic Outlook,” outlining growth forecasts and economic developments for Arab countries in 2025 and 2026.
The report predicts Kuwait’s economy to grow by 2.3% in 2025 and 2.9% in 2026, rebounding from a 2.9% contraction in 2024. This recovery is expected to be supported by higher oil production and growth in the non-oil sector, alongside plans to expand production capacity and gradually ease OPEC production cuts.
Economic diversification and foreign investment are also highlighted as key drivers for Kuwait, alongside accelerated reforms aimed at boosting both social and economic development. Inflation is expected to stabilize at moderate levels, around 2.6% in 2025 and 2026, down from 2.9% in 2024.
Across the Gulf region, AMF forecasts economic growth to rise from 2.2% in 2024 to 4% in 2025 and 4.4% in 2026. The improvement is largely supported by non-oil sector expansion and infrastructure projects that align with broader diversification goals.
For Arab economies as a whole, growth is expected to improve from 2.2% in 2024 to 3.8% in 2025 and 4.3% in 2026, while inflation is projected to decline from 31.9% in 2024 to 20.8% in 2025 and 14.2% in 2026, with most countries experiencing more moderate rates.
The AMF report identifies five main drivers for local growth: faster economic and social reforms, increased foreign investment, recovery in oil production, non-oil GDP growth, and implementation of ambitious production capacity expansion plans. It also notes that global import price changes, including U.S. tariffs, could influence inflation and local production costs.
Monetary policy interest rates in the Gulf as of June 2025 are — Kuwait 4%, UAE 4.4%, Bahrain 5.25%, Saudi Arabia 5%, Oman 5%, and Qatar 4.85%.
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