The Mastercard Economics Institute has released its annual report, 'Economic Outlook 2026', highlighting the key themes expected to shape the global economy next year. The report notes that policy changes which dominated headlines in 2025 are likely to influence economic trends worldwide throughout 2026. While increasing global fragmentation may pose challenges, rising adoption of artificial intelligence AI presents significant opportunities for growth.
In 2026, global GDP growth is expected to moderate to 3.1, while the MENA region is projected to grow by 3.6 year-on-year, although rates will vary across countries. Qatar is forecasted to lead the region with 4.9 growth, supported by higher liquified natural gas LNG production, followed by Egypt at 4.4. The UAE and Saudi Arabia are expected to see GDP growth of 4.3 and 3.6, respectively, with non-oil GDP projected near 5 in both nations. Pakistan is expected to grow 3.6. Other GCC markets are anticipated to grow at the following rates: Oman 3.3, Bahrain 3.1, and Kuwait 2.5. The report highlights that public sector investment and resilient consumption will underpin economic activity across the region.
Inflation is projected to remain stable at around 2 in GCC countries and average 6.7 in oil-importing economies. Disinflation, supported by a weaker US dollar and lower energy prices, may allow central banks to reduce interest rates, helping ease cost-of-living pressures.
