Amman, Dec. 1 (Petra) – The Arab Investment and Export Credit Guarantee Corporation (Dhaman) projected that the value of Arab Gross Domestic Product (GDP) will grow by 1.7 percent in 2025 to approximately $3.8 trillion.
In a statement issued Monday, the Kuwait-based institution said the increase comes despite ongoing geopolitical challenges. It noted that Arab economic output remains heavily concentrated in Saudi Arabia, the United Arab Emirates, Egypt, Algeria, and Iraq, which together account for nearly 73 percent of total GDP.
Dhaman indicated that the economic outlook for 2026 is broadly positive, with Arab GDP expected to expand by 5.6 percent to around $4 trillion. This growth is supported by projected economic expansion in 19 Arab states, including eight oil-producing economies that contribute more than 70 percent of overall Arab output.
The corporation said its cautious projections are based on reduced regional tensions, improving economic conditions, structural reform gains, and higher returns from exports of goods and services.
According to International Monetary Fund estimates cited in the statement, Arab economic indicators will show mixed performance in 2025 due to lower average global oil prices, persistent geopolitical risks, and growing economic and social pressures.
Dhaman added that Arab GDP measured by purchasing power parity is expected to rise by 6.1 percent to surpass $9.8 trillion in 2025, with projections indicating it will exceed $10 trillion in 2026.
The unemployment rate across the region is forecast to decline to 9.4 percent in 2025 and further to 9.2 percent in 2026, while consumer price inflation is expected to ease to 10.3 percent this year before declining to 8.1 percent next year.
The report also highlighted an improvement in the annual average exchange rate of seven Arab currencies last year, those of Tunisia, Qatar, the UAE, Morocco, Algeria, Djibouti, and Syria, while six others remained stable.
It stated that total investment in 14 Arab countries rose by 5.2 percent to about $864 billion this year, equivalent to 27.3 percent of their combined GDP. This figure is projected to increase by 5.4 percent to $910 billion in 2026.
Dhaman added that Arab foreign currency reserves increased by 3.4 percent to nearly $1.2 trillion, enough to cover the region’s imports of goods and services for an average of 5.6 months, with expectations of a further 2.5 percent rise.
Established in 1974, Dhaman is a multilateral institution owned by all Arab states and four joint Arab financial organizations. It provides insurance against credit and political risks to support foreign direct investment flows into Arab countries and facilitate Arab exports and imports.
//Petra// AJ
