MENA+1 GDP: THE REGION’S GROWTH DIVIDE

GROSS DOMESTIC PRODUCT, ECONOMIC GROWTH, OIL, DIVERSIFICATION, PRODUCTIVITY AND THE NEW MENA ECONOMY

JAFAJ ECONOMIC INTELLIGENCE BRIEF

September 19, 2026

Analytical economic brief. Not investment advice.

 

EXECUTIVE SUMMARY

Gross Domestic Product is the most widely used measure of economic output, but the headline GDP growth rate does not tell the whole MENA+1 story.

The region is entering the final months of 2026 with an unusually wide growth dispersion. The IMF’s July 2026 World Economic Outlook Update projects Middle East and Central Asia growth at 0.7% in 2026, followed by 6.5% in 2027. The IMF attributes much of the sharp 2026 slowdown to the longer-than-expected disruption around the Strait of Hormuz and the resulting energy and transportation shock. citeturn1search2turn1search4

That regional figure hides radically different national outcomes. The IMF projects 2026 real GDP growth of 1.7% for Saudi Arabia, 4.6% for Egypt, 2.9% for Türkiye, and 2.3% for the United States. Canada is projected at 1.1% and the United Kingdom at 1.0%. citeturn1search2

Saudi Arabia illustrates the importance of diversification and export logistics. The IMF projects growth of 1.7% in 2026 and 5.5% in 2027, while non-oil GDP is projected to grow 2.6% in 2026 and 4.5% in 2027. citeturn1search7

Egypt provides a different model. Real GDP growth reached 5.0% in the third quarter of FY2025/26 and 5.2% over the first nine months; the IMF expects approximately 4.6% growth for FY2025/26. citeturn1search8

Israel’s economy was sharply affected by the regional conflict. The IMF revised its 2026 growth forecast to 3.5%, down from 4.8% before the war, after a sharp first-quarter contraction followed by an expected rebound. citeturn1search0

The central lesson is the same as the inflation lesson, but with a different economic variable: MENA+1 is not one GDP economy. It is a collection of oil exporters, oil importers, diversified service economies, conflict-affected economies, tourism economies, manufacturing platforms, financial centers and countries whose output data require special interpretation.

For the MENA+1 Economic Index, GDP should therefore be treated as a multidimensional growth system: real GDP growth + nominal GDP + GDP per capita + purchasing-power-adjusted GDP + non-oil growth + sector composition + investment + productivity + employment + fiscal capacity + external exposure.

The central question is not simply: How fast is the economy growing? It is: What is producing the growth, who is receiving it, how durable is it, and what happens if the underlying external shock changes?

1. THE CENTRAL FINDING: MENA+1 HAS A GROWTH DIVIDE

The latest forecasts show that the region contains several different growth regimes.

Economy	2026 real GDP growth	2027 projection	Analytical issue
Middle East & Central Asia	0.7%	6.5%	Regional average masks extreme dispersion
Saudi Arabia	1.7%	5.5%	Oil/logistics resilience + non-oil diversification
Egypt	4.6%*	4.4%	Domestic recovery, reform and external vulnerability
Türkiye	2.9%	3.6%	High inflation, domestic demand and reconstruction dynamics
Israel	3.5%	4.4%	Conflict shock, rebound and productivity
United States	2.3%	2.2%	Technology-led resilience
Canada	1.1%	1.7%	Slower advanced-economy growth
United Kingdom	1.0%	1.3%	Low-growth advanced economy
Euro area	1.1%	1.2%	Energy and manufacturing exposure

*Egypt is reported on a fiscal-year basis in the IMF WEO.

The IMF’s July regional forecast is for the broader Middle East and Central Asia grouping, while country figures use the IMF’s selected-economy WEO table and country consultations. Forecasts are not all measured on identical calendar/fiscal-year conventions. citeturn1search2turn1search4

2. WHAT GDP ACTUALLY MEASURES

Gross Domestic Product measures the monetary value of final goods and services produced within an economy during a defined period.

• Consumption — household spending.
• Investment — business investment, construction, inventories and related capital formation.
• Government spending — public consumption and investment.
• Net exports — exports minus imports.

GDP = CONSUMPTION + INVESTMENT + GOVERNMENT SPENDING + NET EXPORTS

GDP is therefore a production-and-expenditure measure. It is not a direct measure of household wealth, inequality, happiness, fiscal sustainability or living standards.

A country can have strong GDP growth while households experience rising costs, weak purchasing power or an uneven distribution of gains.

3. NOMINAL GDP VERSUS REAL GDP

NOMINAL GDP

Measures output at current prices. It can rise because an economy produces more, because prices rise, or both.

REAL GDP

Attempts to remove the effect of price changes so that changes in physical economic activity are more visible.

For growth analysis, real GDP is normally the central measure.

For economic size, financial-market scale and debt ratios, nominal GDP remains essential.

This distinction is especially important in high-inflation economies such as Türkiye and Egypt. Rapid nominal GDP growth can coexist with much slower real output growth.

4. GDP PER CAPITA: THE MISSING NUMBER

Total GDP tells us the size of an economy. GDP per capita provides a rough measure of output per person.

A country can grow 5% while its population grows 3%. Output per person then rises much less than headline GDP.

For MENA+1, GDP per capita should be monitored in both nominal and real terms.

• Total real GDP growth — size of the economy.
• Real GDP per capita — output available per person.
• Nominal GDP per capita — useful for market and income comparisons.
• PPP-adjusted GDP per capita — useful for comparisons of domestic purchasing power.

5. WHY PPP GDP AND MARKET-EXCHANGE-RATE GDP TELL DIFFERENT STORIES

Purchasing-power parity adjusts for differences in domestic price levels. Market-exchange-rate GDP converts economies using prevailing exchange rates.

Both are useful, but they answer different questions.

Market-exchange-rate GDP is generally more relevant to international finance, external debt and the global purchasing power of domestic output.

PPP GDP is often more informative when comparing the domestic scale of economic activity and living standards.

JAFAJ should never mix the two without identifying which measure is being used.

6. THE 2026 REGIONAL GDP SHOCK

The 2026 conflict produced a major growth shock through three principal channels: energy, trade routes and business confidence. The IMF describes the disruption as a multifaceted shock to energy markets, trade routes and confidence. citeturn0search4

The World Bank’s April 2026 regional update, excluding Iran, projected regional growth slowing from 4.0% in 2025 to 1.8% in 2026, 2.4 percentage points below its January forecast. citeturn0search3turn0search6

The IMF subsequently revised the broader Middle East and Central Asia growth outlook further in its July update, projecting 0.7% growth in 2026 and 6.5% in 2027. citeturn1search2

The different figures are not necessarily contradictory. They reflect different regional definitions, forecast vintages and assumptions.

7. THE ENERGY-TO-GDP TRANSMISSION MECHANISM

ENERGY DISRUPTION → HIGHER ENERGY COSTS → LOWER PRODUCTION / HIGHER COSTS → LOWER OUTPUT → LOWER GDP

For oil exporters, the mechanism can operate in the opposite direction if higher prices raise export revenue enough to offset production or transportation losses.

For oil importers, higher energy costs can reduce household purchasing power, business margins and investment.

For countries located near disrupted trade corridors, the shock can also hit tourism, aviation, shipping, logistics and manufacturing.

8. OIL EXPORTERS VERSUS OIL IMPORTERS

OIL EXPORTERS

• export revenue can increase when prices rise
• fiscal receipts can improve
• sovereign reserves can provide a buffer
• domestic activity can still be disrupted by transport constraints

OIL IMPORTERS

• energy import bills rise
• trade deficits can widen
• currency pressure can increase
• household and business costs can rise
• fiscal subsidies can become more expensive

This creates one of the most important structural distinctions in MENA+1 GDP analysis.

9. DIVERSIFICATION: THE NEW GDP QUESTION

The critical question for an oil-producing economy is increasingly not how much oil it produces, but how much of its GDP can continue growing when oil production or export routes are disrupted.

Saudi Arabia is a useful example. The IMF says the economy has been supported by strong fundamentals, diversified oil and logistics infrastructure, and efforts to ease bottlenecks. It projects 2026 non-oil growth at 2.6%. citeturn1search7

This is why MENA+1 should distinguish total GDP from non-oil GDP wherever reliable data are available.

10. SECTOR COMPOSITION MATTERS

GDP growth becomes much more informative when broken into sectors.

• Oil and gas
• Manufacturing
• Construction
• Trade
• Transportation and logistics
• Tourism
• Financial services
• Technology
• Real estate
• Agriculture
• Public services

Two economies can both grow 4%, while one grows through productive private investment and another grows primarily through a temporary commodity boom. The headline number is identical; the economic structure is not.

11. CONSUMPTION-LED GROWTH

Consumption can provide a powerful short-term GDP engine.

Rising employment, wages, credit availability and consumer confidence can increase household spending.

But consumption financed primarily through debt or temporary fiscal transfers may not be as durable as productivity-led growth.

JAFAJ should therefore ask whether consumption growth is accompanied by rising productivity, investment and household income.

12. INVESTMENT-LED GROWTH

Investment is particularly important for MENA+1 because infrastructure, logistics, energy, technology, housing and industrial capacity can expand future productive potential.

Government-led capital projects can increase GDP in the short run and expand capacity in the long run.

The key analytical distinction is between investment that raises future productive capacity and spending that produces only temporary activity.

13. GOVERNMENT SPENDING AND GDP

Government expenditure directly enters the expenditure measure of GDP.

But public spending is not automatically productive.

• Capital infrastructure can raise future capacity.
• Education and health spending can strengthen human capital.
• Defense spending can increase demand but may have different long-run productivity effects.
• Subsidies can protect households while creating fiscal costs.
• Administrative spending may support public services without proportionally increasing productive capacity.

GDP accounting measures the expenditure. Economic analysis must examine the quality and durability of that expenditure.

14. NET EXPORTS AND THE MENA MODEL

Exports can be a major GDP engine for oil producers, manufacturing platforms, tourism economies and logistics hubs.

Imports subtract from the expenditure measure because they represent production occurring elsewhere.

A temporary import surge associated with major investment can therefore reduce net exports while still supporting long-run growth.

Again, the headline GDP contribution requires context.

15. SAUDI ARABIA: RESILIENCE, OIL AND NON-OIL GROWTH

Saudi Arabia entered 2026 with strong momentum. GDP expanded 4.6% in 2025, supported by the unwinding of OPEC+ production cuts and robust non-oil activity driven by domestic demand. citeturn1search7

The IMF projects real GDP growth of 1.7% in 2026 and 5.5% in 2027. Non-oil GDP is projected to grow 2.6% in 2026 and 4.5% in 2027. citeturn1search7

The analytical question is whether non-oil growth can continue to expand sufficiently to reduce the economy’s sensitivity to oil-market and transportation shocks.

Saudi Arabia is therefore not simply an oil story. It is a diversification test.

16. EGYPT: GROWTH DESPITE EXTERNAL PRESSURE

Egypt’s economy has shown stronger recent activity than the inflation story alone might suggest.

Real GDP growth reached 5% in the third quarter of FY2025/26, with growth of 5.2% over the first nine months. The IMF expects FY2025/26 growth of about 4.6%. citeturn1search8

The growth model is influenced by domestic demand, tourism, remittances, the Suez Canal, investment and reform.

The IMF noted that record remittance inflows, robust tourism receipts and a gradual recovery in Suez Canal revenues helped contain external pressure during the energy shock. citeturn1search8

Egypt therefore demonstrates that a country can experience strong real GDP growth while simultaneously facing substantial inflation and external-financing pressures.

17. TÜRKIYE: GROWTH UNDER HIGH INFLATION

The IMF’s July WEO projects Türkiye’s real GDP growth at 2.9% in 2026 and 3.6% in 2027. citeturn1search2

Türkiye’s GDP analysis cannot be separated from inflation, currency conditions, domestic demand, credit and reconstruction.

The key question is whether growth is being generated by sustainable productivity and investment or by nominal expansion and temporary domestic demand.

For the MENA+1 framework, Türkiye illustrates why GDP growth must always be read alongside inflation and the exchange rate.

18. ISRAEL: CONFLICT SHOCK AND REBOUND

The IMF revised Israel’s 2026 growth forecast to 3.5%, down from 4.8% before the war. The IMF reported a sharp contraction in the first quarter followed by a modest rebound over the remainder of the year. citeturn1search0

The medium-term issue is not merely the size of the rebound. It is the interaction of labor supply, productivity, fiscal pressure, reconstruction and business confidence.

The IMF identifies raising labor supply and productivity as key medium-term priorities. citeturn1search0

19. GULF GROWTH: NOT ONE STORY

The GCC contains economies with very different exposure to oil production, LNG, shipping routes, tourism, finance and diversification.

The IMF’s April regional table projected 2026 growth of 3.5% for Oman, 3.1% for Saudi Arabia and the UAE, while Bahrain and Kuwait were projected to contract and Qatar faced a particularly large disruption before a strong projected rebound. Those April forecasts were subsequently revised in July as the duration of the shock became clearer. citeturn0search5turn1search2

The lesson is methodological: Gulf GDP cannot be treated as a single oil-price function.

20. IRAQ, KUWAIT AND QATAR: THE COMMODITY SHOCK

The IMF’s July assessment specifically identified Iraq, Kuwait and Qatar as commodity producers most directly affected by disruptions to energy output and transportation. It projected sharp 2026 contractions followed by strong rebounds in 2027. citeturn1search2

These economies demonstrate the unusual GDP effect of a supply disruption: higher global commodity prices do not necessarily offset lost physical production and disrupted export routes in the short term.

A commodity exporter can therefore suffer a GDP contraction even while the global price of its commodity rises.

21. OMAN: A DIFFERENT GULF GROWTH PROFILE

Oman combines hydrocarbons with logistics, tourism, manufacturing and diversification initiatives.

The IMF’s April forecast projected 3.5% real GDP growth for Oman in 2026 and 3.4% in 2027. citeturn0search5

The analytical question is whether non-hydrocarbon sectors can continue to provide a larger share of incremental growth and reduce sensitivity to commodity cycles.

22. MOROCCO: DIVERSIFICATION, INDUSTRY AND TRADE

Morocco’s economic model has significant exposure to agriculture, manufacturing, automotive production, tourism, services and European trade.

The World Bank’s June 2026 regional forecast materials projected Morocco at 3.8% growth in 2026. citeturn1search32

For Morocco, the central GDP questions are agricultural conditions, European demand, manufacturing exports, tourism, infrastructure and domestic consumption.

23. JORDAN: SMALL ECONOMY, HIGH EXTERNAL EXPOSURE

Jordan’s GDP is influenced heavily by tourism, remittances, trade, external assistance, energy costs and regional stability.

Its geographic position means that disruptions elsewhere in the region can affect tourism and transportation even when domestic production facilities are not directly damaged.

For the MENA+1 Index, Jordan belongs in the category of economies where external connectivity matters as much as domestic production.

24. PALESTINE: GDP UNDER EXTREME STATISTICAL STRESS

GDP data in conflict-affected economies require exceptional caution.

When factories, farms, stores, transportation systems and normal consumer markets are disrupted, conventional GDP measures become estimates of an economy operating under extraordinary conditions.

The World Bank’s June regional forecast materials projected West Bank and Gaza growth of 4.1% for 2026 after very large contractions in prior years, but the figure must be interpreted in the context of a very low base and severe geographic divergence. citeturn1search32

A high growth rate following a collapse does not necessarily mean that output has returned to its pre-conflict level.

25. GDP BASE EFFECTS: THE MOST COMMON MISREADING

Suppose GDP falls 30% in Year 1 and rises 20% in Year 2. Output has not returned to its original level.

100 → 70 → 84

The economy has grown 20% from its depressed base but remains 16% below its original output level.

This is why post-conflict growth rates can look spectacular while absolute economic activity remains substantially below the pre-shock level.

26. GDP GROWTH VERSUS GDP LEVEL

Growth is a rate. GDP is a level.

A small economy growing 7% may add less absolute output than a large economy growing 2%.

The MENA+1 Economic Index should therefore track both:

• annual real GDP growth
• absolute GDP
• GDP per capita
• change in GDP per capita
• share of regional GDP

This avoids confusing speed with scale.

27. PRODUCTIVITY: THE LONG-TERM GDP ENGINE

Long-term GDP growth depends heavily on productivity — how much output an economy can generate from labor, capital, technology and natural resources.

Productivity growth can come from:

• technology adoption
• education and skills
• better infrastructure
• competition
• business formation
• capital investment
• trade integration
• digitalization
• management improvements
• energy efficiency

For MENA+1, productivity is arguably more important than any single year’s oil price.

28. LABOR SUPPLY AND EMPLOYMENT

GDP growth is more durable when employment and labor productivity rise together.

A country can raise GDP by increasing employment, by increasing hours worked, by increasing capital per worker, or by increasing productivity.

Population growth also matters. Fast population growth can produce strong total GDP growth while leaving GDP per capita much weaker.

The MENA+1 Index should therefore monitor employment, labor-force participation and GDP per worker alongside GDP.

29. TOURISM AS A GDP MULTIPLIER

Tourism affects multiple GDP components simultaneously.

• hotel investment
• restaurant spending
• transportation
• retail
• entertainment
• aviation
• construction
• foreign-exchange receipts

Regional instability can therefore produce a GDP shock even in countries far from the immediate conflict zone.

Egypt, Jordan, Morocco, the Gulf economies and Israel illustrate different versions of this exposure.

30. TRADE CORRIDORS AND GDP

MENA+1 contains some of the world’s most important trade corridors.

• Strait of Hormuz
• Suez Canal
• Red Sea
• Mediterranean shipping routes
• Gulf ports
• East-West oil infrastructure

A disruption can affect GDP through lost exports, delayed imports, higher freight costs, lower tourism, manufacturing interruptions and reduced investment.

The 2026 shock demonstrates that infrastructure geography can become macroeconomic policy.

31. GDP AND INFLATION MUST BE READ TOGETHER

GDP and inflation answer different questions.

GDP asks how much output is being produced. Inflation asks how rapidly prices are changing.

A country can have:

• high growth + high inflation
• high growth + low inflation
• low growth + high inflation
• low growth + low inflation

The most difficult combination is often low growth plus persistent inflation because policymakers face a tradeoff between supporting activity and preserving price stability.

JAFAJ should therefore publish GDP and inflation together rather than in separate analytical silos.

32. GDP AND CURRENCY

Exchange rates influence the international value of GDP.

A country can experience real economic growth while its GDP measured in U.S. dollars declines because its currency depreciates.

This is particularly important for emerging markets.

The MENA+1 Index should therefore distinguish real domestic growth from dollar-denominated market size.

33. GDP AND FISCAL CAPACITY

GDP is the denominator for many major fiscal ratios.

• public debt/GDP
• fiscal deficit/GDP
• tax revenue/GDP
• government spending/GDP
• interest expense/GDP

When GDP falls sharply, debt ratios can worsen even if nominal debt does not increase.

When GDP rises sustainably, fiscal ratios can improve more easily.

This is one reason GDP shocks can become financial-market shocks.

34. MONETARY POLICY AND GDP: COUNTRY-SPECIFIC ANALYSIS

Monetary policy should not be treated as a universal GDP accelerator or brake.

1. Identify whether the economy is experiencing demand weakness or supply disruption.
2. Determine whether inflation is temporary or embedded.
3. Assess the exchange-rate regime and imported inflation.
4. Examine the banking system and credit transmission.
5. Assess fiscal space and public debt.
6. Determine whether investment is being crowded in or crowded out.

An interest-rate cut may support demand in one economy while worsening currency pressure in another. A rate increase may restrain inflation but deepen an investment slowdown. The correct analysis is country-specific.

35. FISCAL POLICY AND GDP

Fiscal policy can stabilize GDP during a shock, but it can also create future constraints.

• Targeted transfers can protect household consumption.
• Public investment can support demand and future productive capacity.
• Subsidies can soften an external shock.
• Large untargeted deficits can increase debt and financing costs.
• Public investment can be more durable when it improves logistics, energy reliability, education or productivity.

The analytical question is not simply whether government spending rises. It is what the spending buys.

36. THE MENA+1 GDP METHODOLOGY

The proposed MENA+1 GDP methodology should use seven dimensions.

DIMENSION 1 — REAL GROWTH

Annual and quarterly real GDP growth where available.

DIMENSION 2 — GDP PER CAPITA

Real GDP per capita and nominal GDP per capita.

DIMENSION 3 — GROWTH COMPOSITION

Oil, non-oil, services, manufacturing, agriculture and construction.

DIMENSION 4 — DEMAND COMPOSITION

Consumption, investment, government spending and net exports.

DIMENSION 5 — PRODUCTIVITY

GDP per worker and productivity indicators where available.

DIMENSION 6 — EXTERNAL EXPOSURE

Exports, imports, tourism, remittances, energy and trade corridors.

DIMENSION 7 — RESILIENCE

Fiscal space, reserves, debt, diversification and institutional capacity.

This creates a substantially more useful measure than simply ranking countries by annual GDP growth.

37. THE MENA+1 GDP DASHBOARD

Indicator	Why it matters	Frequency
Real GDP growth	Core output measure
Current account/GDP	External balance	Quarterly/annual

38. WHY IRAN IS NOT INCLUDED

Iran is intentionally excluded from the MENA+1 Economic Index universe.

This is a methodological decision, not a geographic judgment and not a statement about Iran’s economic importance.

Iran remains highly relevant to MENA GDP analysis because its energy production, trade, currency, sanctions exposure and regional economic effects can alter the GDP outlook of neighboring economies and global energy markets.

The reason for exclusion is consistency with the established MENA+1 corporate and investment universe. Iran’s economic data also require separate treatment because sanctions, multiple exchange-rate conditions, financial restrictions and limited market accessibility affect comparability with the index’s intended investment universe.

Accordingly: Iran should be treated as an external regional economic factor, not as a constituent of the MENA+1 GDP index universe.

The distinction should be maintained consistently across the MENA+1 inflation, GDP, corporate and investment reports.

39. THE WEST VERSUS MENA+1

The comparison with the West is useful because MENA+1 economies operate inside the same global financial and trade system.

The IMF’s July projections place 2026 real GDP growth at 2.3% for the United States, 1.1% for Canada, 1.0% for the United Kingdom and 1.1% for the euro area. Global growth is projected at 3.0%.

Against those benchmarks, several MENA+1 economies are growing faster, while others are experiencing severe contraction.

The comparison should not be framed as a competition. The useful question is why the growth mechanisms differ.

40. THE NEW MENA+1 GROWTH MAP

JAFAJ should classify MENA+1 economies into analytical growth regimes rather than rank them.

COMMODITY-SENSITIVE ECONOMIES

Growth strongly influenced by oil, gas and commodity production.

DIVERSIFYING EXPORT ECONOMIES

Growth increasingly driven by non-oil exports, manufacturing, logistics or services.

DOMESTIC-DEMAND ECONOMIES

Growth driven heavily by consumption, investment and public spending.

TOURISM/SERVICES ECONOMIES

Growth sensitive to tourism, aviation, hospitality and services.

CONFLICT-AFFECTED ECONOMIES

GDP dominated by reconstruction, disruption and base effects.

FINANCIAL/LOGISTICS HUBS

Growth linked to capital flows, trade, aviation, logistics and international services.

A country can move between categories over time. The purpose is to explain the growth mechanism, not to assign a permanent label.

41. 2026 GDP WATCH LIST

1. STRAIT OF HORMUZ

Normalization of maritime traffic and energy exports.

2. OIL AND GAS PRODUCTION

Physical output versus global prices.

3. NON-OIL GROWTH

Whether diversification remains intact.

4. TOURISM

Bookings, arrivals, aviation and hotel activity.

5. INVESTMENT

Government capital projects and private investment.

6. CURRENCIES

Exchange-rate changes affecting dollar GDP and imported inputs.

7. EMPLOYMENT

Whether output growth translates into labor-market gains.

8. FISCAL SPACE

Whether governments can continue supporting demand.

9. PRODUCTIVITY

Whether growth is becoming structurally stronger.

10. RECONSTRUCTION

Whether post-conflict rebuilding creates temporary or durable growth.

42. WHAT COULD PRODUCE A 2027 REBOUND?

The IMF’s July outlook describes a pronounced V-shaped pattern for the region, with 0.7% growth in 2026 followed by 6.5% in 2027.

A rebound of this magnitude would be driven partly by base effects and normalization after the 2026 disruption, rather than by a sudden transformation in underlying productivity.

That distinction is crucial.

A rebound can restore lost output without necessarily increasing long-term productive capacity.

JAFAJ should therefore distinguish recovery growth from structural growth.

43. THE DIFFERENCE BETWEEN RECOVERY AND STRUCTURAL GROWTH

RECOVERY GROWTH

Output returns toward a previous level after a shock.

STRUCTURAL GROWTH

The economy’s productive capacity itself expands.

Examples of structural growth include new factories, better ports, improved education, technology adoption, stronger logistics and higher productivity.

Examples of recovery growth include reopening businesses, restoring exports or rebuilding inventories after a disruption.

Both are real GDP growth. They are not economically identical.

44. THE LONG-TERM MENA+1 GDP QUESTION

The region’s long-term economic challenge is to transform commodity wealth, human capital, infrastructure and geographic position into sustained productivity growth.

• education and skills
• female and youth labor-force participation
• private-sector dynamism
• technology adoption
• trade integration
• energy reliability
• transport infrastructure
• financial-market depth
• business formation
• institutional quality

These variables determine whether the region’s GDP expands because it is temporarily benefiting from favorable external conditions or because its productive capacity is increasing.

45. CONCLUSION

The MENA+1 GDP story in 2026 is a story of divergence, disruption and transition.

The region contains economies contracting sharply, economies growing moderately, economies recovering rapidly, and economies attempting to shift from commodity dependence toward diversified production.

The IMF’s July outlook captures the extraordinary short-term swing: regional Middle East and Central Asia growth is projected at 0.7% in 2026 and 6.5% in 2027.

But the headline regional number is less important than the mechanisms underneath it.

Saudi Arabia’s experience shows the importance of diversification and alternative export routes. Egypt shows how domestic recovery can coexist with inflation and external pressure. Israel demonstrates the GDP effects of conflict followed by rebound. Türkiye shows why GDP must be read with inflation and currency data. Iraq, Kuwait and Qatar demonstrate the vulnerability of commodity producers when physical export and transport systems are disrupted.

For the MENA+1 Economic Index, GDP should therefore become a multidimensional indicator rather than a single growth percentage.

The index should track real GDP, GDP per capita, nominal GDP, PPP GDP, non-oil growth, sector composition, investment, consumption, exports, tourism, remittances, employment, productivity, debt and external vulnerability.

The central question for JAFAJ is not simply: How fast is MENA+1 growing?

It is: What is producing the growth, how durable is it, how widely is it distributed, and what happens when the external shock disappears?

That is the difference between reporting GDP and understanding the MENA+1 economy.

ENDNOTES AND SOURCES

1. International Monetary Fund, World Economic Outlook Update, July 2026, Global Economy in Crosscurrents of War and Technology.
2. International Monetary Fund, Regional Economic Outlook Update for the Middle East and Central Asia, April 2026, War in the Middle East: Economic Spillovers and Policy Challenges.
3. International Monetary Fund, July 2026 country and WEO data for Egypt, Saudi Arabia, Türkiye, Israel, United States, Canada and United Kingdom.
4. International Monetary Fund, 2026 Article IV Consultation with Israel, July 1, 2026.
5. International Monetary Fund, 2026 Article IV Consultation with Saudi Arabia, July 29, 2026.
6. International Monetary Fund, Egypt Seventh Review under the Extended Fund Facility and Second Review under the Resilience and Sustainability Facility, July 30, 2026.
7. World Bank, Middle East, North Africa, Afghanistan & Pakistan Economic Update, April 2026.
8. World Bank, Global Economic Prospects — June 2026, MENA regional forecast materials.
9. Methodological note: GDP comparisons use real GDP growth unless otherwise identified. Forecast vintages, regional definitions, calendar-year versus fiscal-year reporting, base effects and revisions can produce different published figures. Country forecasts should therefore always be labeled by source and vintage.
10. MENA+1 universe note: Iran is excluded from the MENA+1 Economic Index universe by methodological design. It remains an external regional economic factor because of its energy, trade, financial and geopolitical importance.