KUWAIT, 1st December, 2025 (WAM) -- The Arab Investment & Export Credit Guarantee Corporation (Dhaman) revealed that the value of Arab gross domestic product (GDP) rose by 1.7 percent to hit roughly US$3.8 trillion in 2025 despite regional geopolitical challenges, with its geographical concentration continuing in Saudi Arabia, UAE, Egypt, Algeria and Iraq with a share of nearly 73 percent of the region's total.

In a press release on the occasion of the issuance of its fourth quarterly bulletin "Dhaman Al-Istithmar" for 2025, the Corporation explained that Arab economic performance forecasts were generally positive for 2026, with an expected rise of 5.6 percent the value of Arab GDP to around US$4 trillion, driven by a potential growth of the GDP in 19 Arab countries, including eight oil economies that contribute over 70 percent of the Arab GDP. This comes amidst guarded optimism that the region's unrest and conflicts are set to ease, the economic situation to improve, and benefits of structural reforms and merchandise and service exports to rise.

The Corporation said that IMF forecasts show that Arab economic performance indicators were generally mixed during 2025 due to declining global oil prices, continued geopolitical risks in the region and mounting economic and social risks.

The value of the Arab GDP, according to purchasing power parity, surged by 6.1 percent to exceed US$9.8 trillion, and is expected to keep rising to exceed US$10 trillion in 2026.

A slight decline in the GDP per capita in Arab countries by 0.3 percent down to US$7,806 during 2025, compared to a 4 percent hike, according to purchasing power parity, to exceed US$20,000 amid the continued large disparity between oil-producing countries and lower-income ones.

The region's average unemployment rate edged down to 9.4 percent during 2025, driven by a drop in unemployment rates in all countries of the region amid forecasts that it will continue to fall to 9.2 percent in 2026.

In conjunction with the fall in inflation rates in 16 Arab countries during 2025, the average consumer price inflation rate in the Arab region declined to around 10.3 percent in 2025. It is likely to keep falling to reach 8.1 percent in 2026.

The average annual exchange rate of 7 Arab currencies of Tunisia, Qatar, the UAE, Morocco, Algeria, Djibouti and Syria improved against the US dollar during 2025, while the currencies of six countries remained stable and seven other Arab currencies declined against the dollar during the same year.

The combined virtual deficit of Arab budgets shot up by 53 percent to hit roughly US$95 billion in 2025, making up 2.5 percent of the Arab GDP, affected by a 13 percent drop in the average global oil prices down to US$69 per barrel during 2025. This deficit is likely to fall slightly to US$94.5 billion in 2026.

Total investments' value in 14 Arab countries went up by 5.2 percent to reach around US$864 billion in 2025, accounting for 27.3 percent of the GDP of those countries amid expectations that these investments will rise by 5.4 percent to exceed US$910 billion in 2026.

Arab performance dropped in view of debt indicators, as the ratio of government debt to GDP edged up to 46.2 percent in 2025, and is expected to continue to exceed 47 percent in 2026. The ratio of Arab external debt also shot up to about 54.6 percent of Arab GDP during 2025, while it is expected to go up slightly to hit 54.7 percent of Arab GDP in 2026.

The Arab current account surplus shot down by 47 percent to US$63 billion in 2025, representing 1.7 percent of the Arab GDP. It is expected to nosedive to US$41.5 billion, making up only 1 percent of the Arab GDP in 2026.

Arab foreign exchange reserves rose by 3.4 percent to roughly US$1.2 trillion, which is enough to cover Arab merchandise and service imports for about 5.6 months as an annual average. These reserves are projected to rise by 2.5 percent in 2026 and import coverage months will increase slightly to 5.7 months during the same year.