MUSCAT : In its latest publication titled “Macroeconomic Outlook for the Arab Region,” ESCWA noted that the anticipated improvement comes despite escalating geopolitical tensions and ongoing global financial pressures. The report points to stabilising supply chains and the continued expansion of non-oil sectors as key drivers behind the expected recovery.

ESCWA also projected that regional inflation could ease to 5.4 per cent by 2027, reflecting improved economic conditions and greater resilience across several Arab economies.

However, the report highlighted disparities in growth performance among countries in the region. High-income Arab countries are expected to record growth of 4.2 per cent, while middle-income countries are forecast to grow by 3.3 per cent. In contrast, low-income nations continue to face significant financial and humanitarian challenges, with only limited recovery anticipated over the next two years.

The situation in the occupied Palestinian territories remains particularly dire. ESCWA underscored the scale of the humanitarian catastrophe in the Gaza Strip amid ongoing Israeli aggression, estimating reconstruction costs at approximately $70 billion. The report stated that around 78 per cent of buildings in Gaza have been destroyed, compounding severe human and material losses.

In its concluding remarks, ESCWA urged Arab states to accelerate digital transformation, invest more deeply in human capital, reduce reliance on hydrocarbons, and align public and private investments with national development priorities.