BEIRUT : The United Nations Economic and Social Commission for Western Asia (ESCWA) has forecast a gradual resurgence for the Arab economy during 2026, with the growth rate ascending to 3.7 percent, compared to 2.9 percent in the previous year.

The report issued today by the UN Commission, entitled “Macroeconomic Projections for the Arab Region,” elucidated that this improvement materializes notwithstanding escalating geopolitical tensions and the persistence of global financial pressures. It indicated a likely decline in the regional inflation rate to 5.4 percent by the year 2027, propelled by the stabilization of supply chains and the expansion of non-oil sectors.

The report noted a disparity in growth indicators among Arab states; it is anticipated that high-income nations will register growth of 4.2 percent, while middle-income countries are projected to achieve growth of 3.3 percent. Conversely, low-income nations confront acute financial and humanitarian strains, with expectations of only a limited recovery over the forthcoming two years.

In the occupied Palestinian territories, the report cast a stark light upon the magnitude of the humanitarian catastrophe in the Gaza Strip as a consequence of the ongoing Israeli aggression, estimating the cost of reconstruction at USD 70 billion, amidst devastation that has afflicted 78 percent of buildings, alongside grievous human and material losses.

In its conclusion, ESCWA urged Arab states to accelerate digital transformation, invest in human capital, and diminish reliance on hydrocarbons. It further called for the alignment of investments with national priorities to fortify economic stability and engender sustainable employment opportunities.

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