Fitch Ratings has assigned ‘neutral’ outlook for Middle East and North Africa (MENA) sovereigns in 2026.
The outlook balances fairly stable oil prices, solid economic growth and some fiscal reform against political and geopolitical risks, it said.
"It is unclear whether the ceasefire in Gaza will solidify, but we do not expect military operations on the scale of recent years. However, a re-escalation of military conflict between Iran and Israel cannot be ruled out and fallout from the regional conflict combined with a less predictable US foreign policy will reverberate across the region," it said.
It forecast Brent crude to average $63 a barrel in 2026, slightly down on 2025. This will be above the fiscal breakeven oil price for all producers in the Gulf Cooperation Council expect Bahrain, Saudi Arabia and, by a small margin, Oman. Economic diversification backed by government and government-related entity spending and reform, combined with higher oil production will strengthen GDP growth.
Reform should support the economies and fiscal positions of most of the regions non-oil exporters. However still weak growth and social stability considerations will constrain progress in dealing with debt levels that are high relative to peers, it said.
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