Middle East stands out as a growth outlier amid recession risks, inflation pressures, and policy uncertainty

 Against the backdrop of rising global volatility, St. James’s Place (SJP), a FTSE-listed global financial advisory firm with over one million customers and $245 billion in assets under management, is urging investors to stay anchored to long-term fundamentals and adopt diversified strategies to weather volatility.

Speaking at the Global Economic Outlook 2025 Conference in Dubai, convened by St. James’s Place with participation from the BlackRock Investment Institute and The Economist Intelligence Unit, experts presented a sobering but pragmatic view of the world economy. 

Latest global economic data by The Economist Intelligence Unit forecasts global GDP growth to slow to just 1.9% in 2025, with the United States projected to experience a mild recession and Europe continuing to face weak momentum. Policy uncertainty persists, driven by geopolitical fragmentation, erratic fiscal and monetary policy, and intensifying trade tensions. At the same time, inflation remains elevated, and the US dollar is expected to weaken through 2025–26, ending a decade-long appreciation cycle and setting the stage for shifts in capital flows and asset valuations.

It is not all doom and gloom though. Despite the uncertainty clouding the global outlook, the Middle East stands out as a region of relative resilience. The Gulf region is projected to experience steady growth, underpinned by anchored public finances, strong external positions, and a reform-driven policy agenda. Governments are accelerating economic diversification efforts, investing in digital infrastructure, high-tech industries, and productivity-enhancing sectors. Structural reforms continue to improve the region’s business and investment environment, boosting its appeal to foreign capital.

The UAE now ranks 15th globally in the EICN Business Environment Index—the highest in the Middle East. Empirical data shows that such improvements in business environment scores are often followed by multi-year increases in GDP per capita, investment levels, and FDI inflows. With expanding international trade and investment agreements and a young, growing population, the region is well-positioned to capture long-term capital.

"The Middle East is no longer just a diversification play, it has the potential in becoming a more core investment destination," said Angelina Lai, Chief Investment Officer for St James’s Place Asia and Middle East. "For investors seeking growth, stability, and structural transformation, the region presents compelling opportunities that cannot be ignored."

Looking at the investment landscape, St. James’s Place believes that today’s volatility will reward investors who combine patience, expertise, and discipline. 

"Investors today are navigating one of the most complex economic environments we've seen in decades. High policy uncertainty, fragmented geopolitics, and evolving growth patterns are rewriting the rules of investing,” said Justin Onuekwusi, Chief Investment Officer, St. James’s Place. "In this landscape, successful investing requires staying focused on the fundamentals, staying disciplined, and staying resilient for the long term. Good advice is more critical than ever. Every investor has unique goals, time horizons, and preferences — and these need tailored, actively managed strategies, especially during times of uncertainty.”

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