MEED sees Kuwait entering 2026 with renewed economic weight

• Real GDP growth is projected to climb to 3.9% by 2026, up from an estimated 2.6% in 2025
• MEED index places Kuwait third regionally, a position anchored in what the magazine describes as ‘strong fundamentals’
• Contract awards surged by around 50% during 2025
• Weakest performances on the index are expected in Bahrain, Tunisia and Algeria.

Kuwait is entering the second half of the decade with renewed economic momentum, as a revival in the projects market combines with stronger macroeconomic indicators to reshape the country’s growth outlook by 2026.

According to MEED magazine’s latest analysis, the Kuwaiti economy is expected to accelerate markedly, underpinned by expanding public investment, solid fiscal buffers and a rebound in infrastructure activity after years of subdued performance.

Real GDP growth is projected to climb to 3.9% by 2026, up from an estimated 2.6% in 2025, reflecting both improved project execution and a supportive fiscal environment.

The outlook is reinforced by sizeable fiscal and current account surpluses, each forecast to exceed 10% before allocations to the Future Generations Fund, providing the state with ample capacity to sustain capital spending while maintaining financial resilience.

MEED’s Economic Activity Index places Kuwait third regionally, a position anchored in what the magazine describes as “strong fundamentals” and a decisive turnaround in domestic project activity.

Infrastructure spending, long constrained by delays and weak award volumes, has regained traction. Contract awards surged by around 50% during 2025, signaling a clear shift in execution pace and investor confidence.

The report highlights that the value of newly awarded contracts now stands at roughly four times the value of projects completed over the same period. This imbalance, while underscoring execution challenges, has also driven a 29% rise in the value of projects currently under implementation, expanding the pipeline that is expected to feed growth over the coming years.

Regionally, MEED notes diverging trajectories as 2026 approaches. The United Arab Emirates is set to remain the region’s strongest performer, with GDP growth forecast at 5% and annual project awards exceeding $90 billion—around three-quarters higher than the average of the past decade.

Qatar, meanwhile, is described as having the most optimistic outlook, with growth projected to reach 6.1% by 2026, supported by liquefied natural gas expansion and a 24% recovery in the projects market following the post-World Cup slowdown.

Saudi Arabia is expected to record growth of about 4% in both 2025 and 2026. Although contract awards have declined by 23%, the scale of activity remains elevated, standing 65% above the 10-year average, reflecting the continued breadth of Vision 2030-linked developments.

Beyond the Gulf, the picture is mixed. Morocco is forecast to grow by 4.4% in 2025, with its projects market stabilizing at around $10 billion—double its long-term average. Oman’s growth is expected to rise to 4% by 2026, though fiscal consolidation has sharply reduced contract awards by around 50%.

Jordan faces tighter financial conditions and modest growth of 2.9%, yet the financing of the $6 billion Aqaba–Amman desalination and water transport project marks a significant milestone.

In Iraq, MEED anticipates growth of 3.6% by 2026, driven by heavy government spending exceeding $30 billion on projects. Egypt’s outlook is more constrained: despite a projected growth rate of 4.5% in 2026, high inflation nearing 20% in 2025 and persistent fiscal pressures have contributed to a 40% drop in project awards, pushing activity below its long-term average.

The weakest performances on the index are expected in Bahrain, Tunisia and Algeria. Bahrain’s growth is forecast at 3.3%, alongside a steep 60% fall in project activity compared with historical norms.

Tunisia is projected to grow by just 2.1% in 2026, while Algeria ranks last on the index, with growth expected to slow to 2.9% and contract awards halved, amid warnings that the outlook will remain uncertain without deep structural reforms.

MEED notes that its Economic Activity Index combines macroeconomic and financial indicators with detailed projects data to gauge future economic potential across regional markets. For Kuwait, the findings suggest that a long-awaited revival in project execution, coupled with robust fiscal buffers, could provide the foundation for steadier and more diversified growth as the country moves toward 2026.