Moody’s stated that by 2025, it predicts that the MENA region could quickly cruise at about 2.9% from a 2.1% GDP growth projected for 2024 as oil production cuts are being lessened by hydrocarbon exporters in the region.

PC: Oil & Gas Middle East
Oil Exporters to Drive Only Part of Hydrocarbon Recovery
The average real GDP growth of hydrocarbon-exporting nations would be about 3.5% in 2025, against 1.9% in 2024. With Saudi Arabia, the UAE, Iraq, Kuwait, and Oman expected to start easing the oil production cuts they implemented in 2023, they should be the main room-for-manoeuvre supplies.
Dr. Alexander Perjessy, Vice President-Senior Credit Officer at Moody’s, indicated that production cuts during 2023-2024 lowered growth among hydrocarbon exporters by over more than three percentage points. However, other than forecast events, the growth from oil production in 2025 is going to, on average, construct an increase of pretty close to half a percentage point to it.
Dangers to Growth of Oil Production
That said, other risks remain. Weaker-than-expected growth for oil demand among key importers like China and rising oil production, mainly from outside OPEC+, particularly in the USA, could pressurize things. Aware of these risks, OPEC+ members had pushed back the production increase for April 2025.
Hydrocarbon Activity Robustness to Stay Unshaken
Non-hydrocarbon economic activity is likely to be sustained at a higher level, backed up by structural reforms and large-scale project investments; Perjessy indicated that this growth, in most cases, will be higher relative to the pre-pandemic average for the five years leading up to 2020.
Saudi Arabia is likely to suffer most severely given that government and sovereign fund expenditure on the Vision 2030 economic diversification programme would spill over into 2025.
Non-Hydrocarbon Activity to Remain Strong
Robust non-hydrocarbon activity in the economies of the MENA region is expected, with structural reforms and large-scale investment projects behind the boost. Perjessy mentioned that the growth rate in 2020 has been forecasted to exceed many of the pre-pandemic growth rates that were recorded during the five years before 2020.
Saudi Arabia will be impacted the most by large investments, as government and sovereign wealth fund spending under the Vision 2030 economic diversification program continues into 2025.
In the UAE, non-oil growth is forecasted to remain steady at around 5% in 2025, slightly lower than in previous years, due to the completion of key infrastructure projects. Structural reforms since 2020-such as easing foreign ownership limits, introducing long-term residency permits, and removing some social restrictions-have bolstered the UAE’s position in becoming a global hub for trade, transportation, tourism, and financial services.
Growth Drivers in Other MENA Countries
Qatar’s projected growth will indeed be favorable. Its petrochemicals’ growth is propelled due to the expansion of processes for its LNG production capacity, which is likely to come online between 2026 and 2030.
In Kuwait, the prospect of non-oil growth is expected via major projects, such as construction projects involving new port and airport terminal buildings, Perjessy explained.
Moody’s outlook highlights the growth prospects for the region in 2025, which would be boosted by the recovering oil production and solid non-oil economic activities backed by reforms and investments.