Following the tensions and the ceasefire, what will the new economic dynamics in the Middle East look like?

Recent geopolitical developments in the Middle East have captured the world’s attention, raising legitimate questions about the region’s stability and economic future. However, for those who live and work there, the reality is often quite different from outside perceptions. Indeed, the region is demonstrating remarkable resilience, effective crisis management, and an unwavering determination to continue on its path of diversification and growth.

This article is based on the webinar presented by:

• Jean-Pierre LABRY, Managing Partner of TTE Gulf and President of Globallians,
• Marie-Catherine MOLLAY, Head of GCC Development – EuroQuity (Bpifrance), Department of International and European Affairs, based in Riyadh, Saudi Arabia
• Maël MBAYE, Director of Export Development for the Middle East, North Africa, Turkey, and Central Asia – Bpifrance, based in Dubai, United Arab Emirates.

The Middle East’s Strong Economic Foundations: A Region with Proven Potential

The Middle East is a region with a solid economic foundation that is often underestimated, based in particular on:

The dynamic demographics of the Gulf countries:

The Gulf countries have a population of 62 million (75% of whom live in Saudi Arabia and the United Arab Emirates), and the Middle East region (including Egypt) has a population of 120 million. More than 50% of this population is under the age of 30, representing a considerable human capital and a driving force for growth.

Low public debt:

Unlike many Western economies, the Gulf countries have very low public debt (around 30% for Saudi Arabia, 31% for the UAE, and 40% for Qatar, compared to 117% for France in 2025). This exceptional financial foundation is bolstered by colossal sovereign wealth funds, representing one-third of global funds, such as Saudi Arabia’s Public Investment Fund (PIF).

Effective crisis management:

The recent tensions have been geographically limited (primarily to Iran and Lebanon), with highly targeted strikes in the Gulf states. The crisis management by local governments has been praised, as in the United Arab Emirates, where the expenses of stranded tourists were fully covered. Daily economic activity has continued uninterrupted, a fact often overlooked by the international media.

The moderate impact of oil:

Although a temporary decline in oil production was observed in some countries (a decrease of approximately 9 million barrels per day out of a global total of 100 million), the doubling of oil prices (from $60 to nearly double that amount) helped maintain significant revenues, thereby minimizing the net financial impact.

Strong strategic partnerships:

La France, par exemple, bénéficie d’une excellente image, notamment pour sa coopération militaire (défense aérienne des Émirats) et son implication culturelle (développement d’AlUla).

Strategically accelerating economic diversification: toward a post-oil future

Economic diversification is at the heart of the strategies of Middle Eastern countries. This development goal—to break free from dependence on oil—is being accelerated by current events and energy challenges.

Long-term visions:

In the United Arab Emirates, oil now accounts for only 20% of GDP. The country is a model of economic success for the region. Saudi Arabia (Vision 2030) and the UAE (Vision 2071, marking the centennial of their independence) are engaged in large-scale projects. Recent restructuring of sovereign wealth funds (e.g., Abu Dhabi; the appointment of a new Minister of Investment in Saudi Arabia from the PIF) demonstrates a strong political will to steer this transformation.

Priority investment areas for the region:

• Tourism, travel, and entertainment: Saudi Arabia is focusing on religious tourism and developing new destinations (Neom, AlUla). In fact, 2 million pilgrims already visit Saudi Arabia each year, and that number is expected to grow.
• Urban development and infrastructure: Projects such as the expansion of Dubai’s Maktoum Airport, the development of Neom, and the future “Sports City” in Dammam are transforming the region and improving connectivity.
• Industry and Logistics: The region aims to become a key logistics hub, seeking to reduce its dependence on the Strait of Hormuz by developing new ports on the Red Sea (around Neom) and multimodal initiatives (air, road, and rail), in collaboration with partners such as CMA CGM.
• Clean energy: Countries in the region are making strong commitments to the post-oil era and the green economy, even though current reserves remain abundant.
• Food security: With the country relying on imports for 80–85% of its food supply, massive investments are planned to strengthen food self-sufficiency.
• Major international events: the upcoming hosting of major international events (Expo 2030 and the 2034 FIFA World Cup in Saudi Arabia) serve as powerful drivers of development and investment.

Growth opportunities for French companies: time to step up the pace

Despite the complex geopolitical landscape, growth prospects for French companies in the region remain strong. Indeed, growth forecasts remain positive; the IMF has slightly revised its projections and now expects 3% growth for the United Arab Emirates and Saudi Arabia, which is significantly higher than the European average (0.8% for France).

Among the promising sectors for French companies in the Middle East are:

• Defense and Aerospace
• Transportation and Logistics
• Safety
• Agriculture and Agri-Food
• Clean technology (Climate Tech) and technological innovation: These areas are top priorities for local investment funds, with strong incentives for setting up factories and transferring technological capabilities.

Ongoing projects, such as the expansion of Maktoum Airport, have not been disrupted by the conflict. Furthermore, many contracts continue to be signed even during periods of tension (for example, the rail contracts with Keolis/SNCF).

“Local Content” and Competitiveness:

China has a strong and competitive presence, particularly in terms of pricing and financing. However, France benefits from a reputation for innovation and trust. The inclusion of “local content” (e.g., a company based in Saint-Étienne that has set up a factory in Dammam to supply Saudi Aramco) is a major advantage that sets France apart from its partners in the region.

The Gulf Markets: Keys to a Successful Entry

Surround yourself with local experts: support from TTE Gulf

Dans les marchés du Golfe, initier son développement à distance est envisageable Néanmoins, la présence locale et la qualité du relationnel jouent un rôle déterminant dans le développement des affaires. Les échanges informels et les rencontres sur place sont souvent essentiels pour instaurer la confiance et faire avancer les décisions. Les entreprises doivent également comprendre le fonctionnement spécifique de l’écosystème régional, marqué par une forte implication de l’État, de ses agences et par des dispositifs d’incitations favorisant l’implantation et le transfert de technologies. Dans ce contexte, s’appuyer sur des partenaires disposant d’une expertise locale comme TTE Gulf, dont les bureaux se situent aux Emirats Arabes Unis, en Egypte et en Arabie Saoudite, constitue un atout stratégique pour réussir son implantation sur ces marchés complexes. Enfin, les marchés du Golfe exigent une grande capacité d’adaptation : les opportunités peuvent émerger très rapidement, imposant aux entreprises réactivité, flexibilité et agilité opérationnelle.

Strategic Support from Bpifrance and Euroquity: Comprehensive Export Assistance

To support their growth initiatives, French companies can rely on a robust support ecosystem. Bpifrance offers a Continuum of Export Solutions to provide comprehensive strategic support (including the prospecting phase, market validation, and contract negotiation). BPI France’s Euroquity digital platform connects more than 24,000 companies (startups, SMEs) with over 1,500 investors (family offices, VCs, development capital firms). These programs are fully open and accessible to projects in the Gulf region and offer companies support to secure financing for their expansion into new markets.

For more information, watch the webinar recording for a complete overview of the solutions offered by BPI France.

Conclusion: Resilience and a long-term vision, we remain on course

Throughout its crises, the Middle East has demonstrated its ability to bounce back and continue its upward trajectory. Today, despite the tense geopolitical situation, local economic activity remains robust, major projects are moving forward, and governments are committed to supporting their businesses.

French companies would be well advised to step up their engagement by leveraging local expertise, such as that offered by TTE Gulf, and the robust support mechanisms provided by partners like Bpifrance. The Middle East remains a key and strategic region, with powerful economic dynamics and sustainable opportunities for those who can invest there with agility, a competitive, high-value-added offering, and a long-term vision.