Office of the Chief Economist, Middle East, North Africa, Afghanistan & Pakistan

Shifting Gears: The Private Sector as an Engine of Growth in the Middle East and North Africa

The MENA region grew at 1.9 percent in 2024 and is expected to grow at 2.6 percent in 2025. This is against a backdrop of increased global uncertainty, particularly in trade policy. The region is far from the frontier in standards of living, largely due to low productivity. The private sector is a critical engine of productivity growth: Businesses create jobs, boost livelihoods, and innovate. The MENA private sector is not dynamic and is ill prepared to absorb shocks. To boost the performance of the private sector, governments in the region may need to rethink their role in engaging with markets including improving competition, the business environment, and the availability of data. Additionally, private sector businesses in the region can increase performance through better management practices and harnessing untapped talent in the region.
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Growth in the Middle East and North Africa

Real GDP growth in MENA is expected at 2.2 percent in 2024, a modest uptick from 1.8 percent in 2023, which nonetheless masks important disparities within the region. The acceleration is driven by the high-income oil exporters, while growth is expected to decelerate among developing MENA countries, both developing oil exporters and developing oil importers. Despite current challenges, the region can dramatically boost growth by better allocating talent in the labor market, leveraging its strategic location, and promoting innovation. Closing the gender employment gap, rethinking the footprint of the public sector, and facilitating technology transfers through trade under enhanced data quality and transparency can help the region leap toward the frontier. Peace is a pre-condition for catching up to the frontier, as conflict can undo decades of progress, delaying economic development by generations.
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MENA Economic Update, April 2024

“The MENA region grew at 1.9 percent in 2023 and is forecasted to grow at 2.7 percent in 2024 amidst a global economy that is in its third consecutive year of deceleration. The tragedy of the conflict in the Middle East has increased uncertainty. Rising debt leaves many countries in the region exposed. This report unpacks the nature of debt in the region. Oil importers have been unable to either inflate or grow out of debt. The report highlights the need to address debt transparency. Extrabudgetary items, especially for developing oil importers, need to be accounted for.”
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MENA Economic Update, October 2023

This update focuses on the human toll of macroeconomic shocks in terms of lost jobs and deteriorating livelihoods in MENA. Growth is forecast to decelerate in 2023 to 1.9 percent amidst low oil production and subdued prices, while oil importers continue to grapple with the effects of the tightening of global financial conditions. The authors estimate that the macroeconomic shocks of 2020-22 led to an additional 5.1 million individuals becoming unemployed in MENA. The report advocates for maintaining the flexibility of real wages in times of shocks, while protecting the vulnerable with well-targeted cash transfers.
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MENA Economic Update, April 2023

High inflation and rising food prices pose a challenge to economies across the Middle East and North Africa (MENA), where growth is expected to slow in the coming year to 3% after growing 5.8% in 2022. Oil exporters, who benefited from a windfall in 2022, will decelerate the most, but a large gap remains between high-income countries and the rest of the region. Titled “Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa,” this twice-yearly edition focuses specifically on the impact of food price inflation on food insecurity.
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Land Matters : Can Better Governance and Management of Scarcity Prevent a Looming Crisis in the Middle East and North Africa?

Across the Middle East and North Africa (MENA) region, land is a scarce and valuable resource. The projected increase in land demand due to demographic trends, coupled with decreasing land supply due to climatic and governance factors, indicate a looming crisis happening at a time when the region is also facing dramatic social and political transformation. Reserves for land cultivation are almost exhausted, while total built-up area will need to expand to accommodate high demographic growth.
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The Office of the Chief Economist of the Middle East, North Africa, Afghanistan & Pakistan provides guidance on strategic priorities and technical quality of economic analysis in the region. It aims to bring the best possible knowledge to bear on the problems of development in the MENAAP Region including through advising on country and sectoral strategies, quality enhancement of economic justification and analysis in adjustment and investment lending and developing and disseminating regional flagship reports. The office also serves as principal regional spokesperson inside and outside the Bank on strategic and economic issues facing the region.

Analytics – We generate original research and leverage existing knowledge to impact policy and institutional reforms in the Middle East, North Africa, Afghanistan & Pakistan. We publish semiannual regional flagship reports, which focus on the most pressing development issues, as well as timely research articles that tackle ongoing challenges facing the region.

Knowledge Outreach – We offer platforms for leading researchers and policymakers to interact, debate, and delve into issues crucial to economic development in the region.

Community of Economists – We foster a network of economists specializing in the Middle East, North Africa, Afghanistan & Pakistan cultivating connections within the World Bank and with external researchers through our diverse research programs that focus on a range of topics including labor markets, gender, and economic diversification.