Amman, March 16 (Petra) – The Kuwait-based Arab Investment and Export Credit Guarantee Corporation (Dhaman) reported that the Arab gross domestic product (GDP) grew by 1.8 percent in 2024, surpassing $3.5 trillion despite regional challenges.

In a statement received by the Jordan News Agency (Petra) on Sunday, Dhaman highlighted that economic activity remained concentrated in Saudi Arabia, the United Arab Emirates, Egypt, Iraq, and Algeria, which together accounted for more than 72 percent of the region’s total GDP.

The corporation projected a positive outlook for the Arab economy in 2025, forecasting a 4.1 percent growth rate. This expansion is expected to be driven by 14 Arab economies, including nine oil-producing countries that collectively contribute over 78 percent of Arab GDP. The forecast is based on cautious optimism regarding a potential easing of regional instability and improved revenues from oil, gas, goods, and services.

Citing International Monetary Fund (IMF) estimates, Dhaman noted that Arab economic indicators diverged in 2024 due to a 4 percent decline in crude oil production and a 1 percent drop in global oil prices. Additional factors included the expansion of the war on Gaza into Lebanon, Yemen, Syria, and Iraq, the ongoing armed conflict in Sudan, climate change, and rising external debt.

According to data published in the fourth quarterly bulletin of 2024 (Investment Guarantee), per capita GDP in the Arab region increased by 1.2 percent to $7,557, with a projected rise to $7,602 in 2025. Based on purchasing power parity, per capita GDP grew by 2 percent to approximately $19,000, though significant disparities remain among Arab countries.

The Arab population grew by 2 percent in 2024, exceeding 467 million people, while the region’s unemployment rate climbed to 9.7 percent. Meanwhile, consumer price inflation reached 12 percent last year, with expectations of a decline to 8.5 percent in 2025.

Fiscal deficits deepened, with the Arab budget surplus of $15 billion in 2023 turning into a $58 billion deficit in 2024. The deficit is projected to widen further to $68 billion this year, equating to about 2 percent of GDP.

Arab debt indicators shifted in 2024, as the government debt-to-GDP ratio declined to 48.3 percent, with expectations of a further decrease to 47.6 percent by the end of 2025. However, the external debt ratio increased to nearly 56 percent of GDP, with a forecasted decline to 54.5 percent this year.

Arab foreign trade in goods and services expanded by 3.6 percent in 2024, exceeding $3.3 trillion. Exports rose by 1 percent, while imports grew by more than 7 percent, leading to a 33 percent reduction in the region’s trade surplus, which stood at $177 billion.

The Arab current account surplus shrank by 51 percent to $89 billion in 2024, representing 2.5 percent of GDP. This figure is expected to drop further to $47 billion in 2025, reducing its share of GDP to 1.3 percent.

Arab foreign exchange reserves increased by 3.7 percent to approximately $1.2 trillion, providing coverage for more than eight months of imports. However, this coverage is expected to slightly decline in 2025 despite a projected 1.2 percent increase in total reserves.

Established in 1974 and headquartered in Kuwait, Dhaman is a multilateral institution comprising all Arab countries and four joint Arab financial institutions. It provides insurance services against credit and political risks to facilitate foreign direct investment in Arab economies and support regional trade.

//Petra// AJ

16/03/2025 14:12:59