While a range of factors will determine the economic future of the Middle East, these five mega-trends should play influential roles in defining the region’s path over the next 12 months.
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Artificial Intelligence
Artificial intelligence (AI) is at the forefront as one of the most influential global forces in the 21st century, propelled by the escalating accessibility and application of data.
Projections suggest that the Middle East region could reap economic benefits of up to $320 billion by 2030 with the widespread adoption of AI technology.
Numerous Middle Eastern nations are actively embracing this trend. In July 2022, Dubai launched a dedicated committee to invest heavily in AI, the metaverse and the digital economy.
Saudi Arabia got in on the act by establishing a National Strategy for Data and AI, unveiling an ambitious initiative to train up to 20,000 specialists by 2030.
Bahrain is leveraging AI to enhance the efficiency of quantifying agricultural production. With these advancements, AI has the potential to contribute nearly $46bn, which translates to approximately 8.2% of the gross domestic product (GDP), to the economies of Bahrain, Kuwait, Oman, and Qatar by the end of the decade.
E-Commerce
The surge in digitalization and the increasing adoption of e-commerce will reform business operations in the region, reshaping traditional paradigms.
Consumers and businesses in the Middle East are well-positioned for an imminent e-commerce explosion, with ample scope remaining for significant expansion in this sector.
Governments are aligning their investments with digital infrastructure development. For example, Saudi Arabia is constructing 14 fully automated smart warehouses in Jeddah through a collaborative effort between the public and private sectors.
The United Arab Emirates (UAE) is intensifying its focus on the flourishing multi-billion-dollar e-commerce market, striving to transition into a cashless society.
Real Estate
The entire Middle East region boasts a rich legacy of property investment, which is of paramount significance to facilitating economic diversification.
Dubai and Abu Dhabi stand out as highly sought-after property markets globally, tipped to witness exponential growth among all real estate markets in coming years.
Elsewhere, real estate constitutes 5% of Bahrain’s GDP and is steadily ascending, with all segments of the country’s real estate sector displaying growth in recent years.
Saudi Arabia is streamlining its property sector by introducing an electronic platform for property registration, simplifying business procedures, and improving accessibility within the market.
Online Casinos
Online casinos are a burgeoning trend, obliging the increasing demand for digital gaming experiences in the region. However, it’s important to note that any form of gambling remains restricted in Kuwait and across the Middle East.
As a result, the emergence of iGaming sites in Kuwait faces hurdles related to legal compliance and adherence to local laws, necessitating creative approaches to navigate these challenges while meeting the entertainment preferences of residents and international visitors.
However, the narrative is slowly changing. Emerging online casinos in Kuwait seem poised to transform the country’s gaming landscape, offering a new and innovative platform for gaming enthusiasts while navigating evolving regulations and cultural considerations.
Tourism
Tourism seems destined to embrace a significant part of the Middle East’s economy as more countries work around the clock to draw visitors from across the globe.
Qatar staging the 2022 FIFA World Cup supports this thesis, as does Saudi Arabia’s winning bid to host the 2034 edition of the world’s most prestigious tournament.
To put the importance of these efforts in context, the 2022 World Cup marked one of the most prominent sporting events ever held in the region, attracting approximately 1.4 million people to Qatar, while an estimated five billion individuals worldwide engaged with the tournament.
Forecasts indicate an average annual growth rate of 7.7% from 2022 to 2032, with the sector projected to reach a value of nearly $540bn during this period. Saudi Arabia has already secured a position among the top 20 most visited countries, primarily propelled by religious tourism.
Abu Dhabi and Dubai are driving robust expansion within the UAE’s travel sector, steering it towards pre-pandemic levels of growth.
