Beirut, 27 March 2024--With the persistence of the war in Ukraine, economic uncertainty continues to prevail globally and in the Arab region, where the war on Gaza and the Sudan conflict are weighing on economies and slowing down growth. With the stabilization of oil and gas prices at moderate levels in 2023, the region’s gross domestic product (GDP) was expected to grow around 3.6% in 2024 and 4.2% in 2025; however, current predictions bring the figure down to 3.3% for 2024.
These findings were released today by the United Nations Economic and Social Commission for Western Asia (ESCWA) in the 2022-2023 issue of its annual "Survey of Economic and Social Developments in the Arab Region”, which provides an overview of main economic and social development indicators and adds prospects for two years. The aim is to support member States' efforts to reform economic institutions, develop and implement evidence-based policies, and improve economic planning processes to achieve sustainable and inclusive development.
According to the Survey, poverty rates in Arab low-income and conflict-affected countries have jumped from 56% and 45% in 2019, respectively, to about 63% and 50% in 2023. The war on Gaza is threatening to push the entire population of the Strip, about 2.3 million Palestinians, into multidimensional poverty, which will affect the whole country as well as Lebanon.
“The situation in Arab conflict-affected countries remains uncertain and is overshadowed by the war on Gaza, political divides and security concerns,” Lead Author of the Survey Ahmed Moummi underscored. “The war, with the severe level of violence against Palestinian civilians, is pushing the Strip into dire economic and social conditions. This situation has propagated to the whole State of Palestine, where the massive number of casualties and injured, in addition to the vast destruction, are extremely likely to push the State 10 to 15 years back,” he warned.
The Survey notes though that the poverty situation is different in Arab high-income countries, where it is projected to decline from 11.4% in 2019 to 10.3% in 2023 and 9.7%` in 2025. These diverging poverty trends in the region are compounded by high levels of inequality, and averages point to a dire situation for more than a third of the region’s population.
This year’s edition also highlights that inflation reached 12.3% in 2023 in the region, mainly because of the halting of the Black Sea Grain Initiative which had a significant negative impact on the prices of essential food items imported by Arab countries. Although inflation is expected to decline to around 7.5% and 6% in 2024 and 2025, the Survey considers that it remains a serious concern for the region, and that containing its undesirable effects should be among the leading priorities in monetary and fiscal policies in most affected countries. This could be done notably through reducing inefficient public expenditure and containing public debt, the Survey adds.
Moreover, the outlook in Arab least developed countries (LDCs) also remains highly uncertain and gloomy, affected by the escalating conflict in the Sudan. The Survey notes that the subregion’s GDP could decrease by 3.8% on average during the 2023–2025 period, with Arab LDCs continuing to face constrained fiscal space and challenging socioeconomic conditions. Nevertheless, their fiscal deficit is expected to improve from 3.2% of GDP in 2023 to 2.6% and 2.3% in 2024 and 2025, respectively.
On the social front, besides high poverty rates, the Arab region continues to register the worst global gender gap score worldwide, and the estimated time to bridge this gap is over 150 years according to the Survey. As for unemployment, it is estimated to be around 11.6% in 2023 and may marginally decrease to 11.5% in 2024. The situation for youth is daunting, with the general youth unemployment rate at 26.4% currently, around 22.2% for men and 42% for women.
Finally, the Survey notes that, given the scale and complexity of internal displacement in the Arab region, an urgent need for multi-pronged, coordinated strategies has arisen. These strategies should address both the unique and common challenges faced by each country, encompassing immediate humanitarian needs, economic resilience and social integration. The Survey thus advocates for increased regional collaboration, which could be the linchpin in navigating this complex landscape through tailored and effective policy interventions.
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About ESCWA
One of five United Nations regional commissions, ESCWA supports inclusive and sustainable economic and social development in Arab States, and works on enhancing regional integration.
For more information:
- Ms. Rania Harb, Public Information Assistant, +961-70-008-879; email: harb1@un.org
