Regional Inflation Seen Easing to 5.4% by 2027
Beirut: The United Nations Economic and Social Commission for Western Asia (ESCWA) has projected a gradual recovery of the Arab economy in 2026, with growth expected to rise to 3.7 percent, compared to 2.9 percent in 2025.
In its report titled “Macroeconomic Projections for the Arab Region,” ESCWA noted that the improvement comes despite escalating geopolitical tensions and continued global financial pressures. The report also forecasts regional inflation to decline to 5.4 percent by 2027, driven by stabilizing supply chains and expansion in non-oil sectors.
The report highlighted disparities in growth prospects across the region:
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High-income countries are expected to record growth of 4.2 percent.
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Middle-income countries are projected to grow by 3.3 percent.
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Low-income countries continue to face significant financial and humanitarian challenges, with only modest recovery anticipated over the next two years.
Regarding the occupied Palestinian territories, ESCWA underscored the scale of humanitarian devastation in the Gaza Strip due to the ongoing Israeli aggression, estimating reconstruction costs at $70 billion, with approximately 78 percent of buildings damaged, alongside severe human and material losses.
In conclusion, ESCWA called on Arab states to accelerate digital transformation, invest in human capital and reduce dependence on hydrocarbons. It also urged aligning investments with national priorities to enhance economic resilience and generate sustainable employment opportunities
