BEIRUT, Dec 31: The United Nations Economic and Social Commission for Western Asia (ESCWA) revealed on Tuesday that political and economic crises will continue to affect growth in the Arab region until 2026.

According to ESCWA’s report, titled "Survey of Economic and Social Developments in the Arab Region for 2023 and 2024," the Arab region will face worsening economic and social challenges during the period from 2023 to 2026.

The report notes that global economic growth is expected to remain below 2.7 percent in 2024, influenced by factors such as rising global interest rates and threats to global trade. These factors will impact both global and regional economies.

ESCWA forecasts slow economic growth of 2.5 percent in the Arab region for 2024, driven by the effects of the Israeli occupation of Gaza and Lebanon, the conflict in Sudan, and fluctuating energy prices. However, growth is expected to rise to 3.9 percent in 2025.

The report also highlights that despite OPEC+ member states voluntarily reducing oil production in the second half of 2023, oil supply is still outpacing demand, putting pressure on oil-producing countries.

For the Gulf Cooperation Council (GCC) countries, ESCWA predicts continued investments in non-hydrocarbon sectors, which will help mitigate the negative effects of declining oil prices. The GCC's GDP growth is projected to be 4.3 percent in 2025.

Meanwhile, the report anticipates that increased global demand for phosphate and gas will boost growth in middle-income Arab countries. These countries are expected to see 2.8 percent growth in 2024, rising to 3.6 percent in 2025. However, the ongoing conflicts in Gaza and Lebanon are expected to have a direct negative impact on neighboring economies, such as Egypt and Jordan.

Countries affected by conflicts and wars are facing severe economic contractions. Palestine is expected to contract by 13.3 percent, Sudan by 12.6 percent, and Lebanon by at least 1.9 percent this year.

The report also warns of rising unemployment rates across the region, with an estimated 11.5 percent unemployment rate in 2024. It predicts that more than a third of the population in the region will live below the poverty line between 2024 and 2026.

Ahmed Moumi, the supervisor of the report preparation team at ESCWA, emphasized the need for comprehensive development plans that focus on innovation and strengthen both regional and international partnerships to address these challenges effectively.

Moumi also called for "radical reform policies" that prioritize enhancing regional cooperation, diversifying income sources, and supporting vulnerable groups. He stressed the importance of joint efforts to mitigate the impact of the interconnected crises, focusing on empowering youth and supporting the most affected groups to ensure a sustainable future.