Growth in new channels, such as e-commerce, new priority sectors for governments, localization incentives, and efforts to improve regulatory environments will create opportunities for businesses. However, ongoing political risks, challenges in talent management, and still-opaque investment information will create risks. Businesses will improve supply chain resilience and inventory management, while enhancing demand planning and revising talent management for workforce localization and the necessary new skill sets. Growing e-commerce for B2C companies and integrating digital solutions for stakeholder engagement and sales processes for B2B firms will be key priorities.


Most MENA countries have reduced COVID-19 restrictions and are preparing to enter 2022 with minimal mobility restrictions. The likelihood of nationwide lockdowns is very low, while some temporary restrictions in Algeria, Morocco, or Lebanon are possible. MENA governments are preparing to support their economies but also remain committed to fiscal consolidation. Newly emerging 2022 budgets indicate Saudi Arabia is planning to reduce total spending while ensuring the Public Investment Fund continues with project rollouts. The UAE is keeping its total budget flat but raising capital expenditures, and Algeria is also focusing on CAPEX and maintaining wage support. Meanwhile, Israel will be ending its stimulus and easing spending growth.

Political developments also continue to keep the operational environment volatile. Gulf countries have recalled their ambassadors from Lebanon, as Saudi Arabia recently banned imports from the country. Saudi Arabia and Iran continue their talks, Israel is evaluating whether to put aside funds for a potential strike on Iran, and recent election results in Iraq are unlikely to improve the security situation.

Qualitative Outlook for Demand in 2022 vs. 2019, MENA

Our View

The MENA region will continue its growth path in 2022, seeing further normalization in consumption and investment patterns. Most countries should return to their pre-pandemic economic size in H2 2022. Lebanon, Algeria, and Iraq will experience political and fiscal challenges that will delay their growth trajectories. The GCC economies will mostly stabilize, especially supported by higher oil prices. Morocco and Egypt will grow, supported by export demand and public investments. High global cost pressures will trickle into the region, potentially pressuring consumers that otherwise should be seeing higher incomes.

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