Middle East Socioeconomic Overview

Report: January 2025

As the world welcomes America’s new leader, the world anticipates huge shifts worldwide. Moreover, it foreshadows that things will change, for better or for worse, in the Middle East. Photo credit: lemonde.fr

1. Table of Acronyms

2. Introduction

2025 begins with massive changes that will forever change the Middle East and the world. From the easing of tensions to the emergence of leaders with different perspectives, there is no doubt that the year will be witnessing changes unlike any other preceding years. While it is still uncertain what will happen geopolitically in certain arenas, in others, there will be further cooperation in so many aspects including energy, and the Levantine Middle East will not be a stranger to this. Hopefully, things will transpire cordially and there will be no further escalation between global powers.

3. The Socio-Economic Situation

Egypt

According to Alarabiya Business, Egypt's Minister of Labor, Mohamed Gebran, expects the care economy to add about 90,000 direct job opportunities during the current year with the growth of private companies' participation in the sector. He claimed that the sector is promising in adding more job opportunities, and coordination is underway with the private sector in this regard to provide more jobs. He added that the initial indicators of the growth of the Egyptian economy during the current year will exceed levels of at least 4%, which means providing more job opportunities, without the minister specifying the total opportunities that will be added during the year. He explained that the Ministry is working to enhance the labor market by creating new and decent jobs, and developing the vocational training system with approved programs that are in line with the needs of the labor market at home and abroad. From her end, Dina Abdel Wahab, founder and managing director of Innovate Education, told Al Arabiya Business that Egypt has great opportunities to export skilled labor in the care economy, especially to neighboring countries in the Arabian Gulf, European countries, and North America. She added that there is a clear shortage in the labor markets in 6 sectors including healthcare for the elderly, early childhood, people with special needs, educational services, and domestic work. She also explained that the care sector worldwide includes about 381 million jobs with an activity volume estimated at $11 trillion, and Egypt has good opportunities in this activity through training and development operations.

Although Egypt’s forecasts growth for this year and for the coming short term, some sources have different views. According to “The Economist”, although there are positive indicators that can support the Egyptian narrative of an improving economy, investors are fleeing and leaving behind a financial and trade deficit. It pointed out that Egypt borrowed excessively, and that the International Monetary Fund rescued the Egyptian economy and government four times, and that was before the latest rescue package announced last March. Afterall, inflation rate is still close to 25%, the current account deficit persists, the private sector is in a deep recession, high interest rates are holding back growth, and the real estate boom in many new cities requires huge infrastructure spending, much of it in foreign currency which the country lacks.

Jordan

In tandem with the of geopolitical tensions in the region and especially with neighboring Gaza, Jordan breathed a sigh of relief as the war in the area which was under threat in the preceding months to spiral out of control, by reigniting hopes to upgrade its tourism sector. Minister of Government Communication Mohammad Momani announced several decisions made during the Cabinet’s session in Maan Governorate, aimed at bolstering the commercial and tourism sectors, stimulating economic growth, and addressing local challenges. He noted that the initiative aims to support businesses in the region, stimulate economic activity, and promote job creation which is already a top priority of Jordan to adress the high rates of unemployment. Afterall, a recent report issued by the World Economic Forum confirmed that the unemployment issue in Jordan is still the most prominent problem facing the national economy. Also, according to opinion polls adopted by the report, which was titled "Global Risks 2025", unemployment or "lack of economic opportunities" is among the top 5 risks facing the economy, followed by inflation, then economic recession, scarcity of water resources, and public debt. Therefore, the stabilization in the region and the concequent push for a larger tourism industry can be one solution to the problem. This development will definetely build upon the stabilization of the economy through internal reforms that have buffered Jordan against the dramatic events in the region. One particular sector that reforms supported was the production sector. According to the quarterly report of the Department of Statistics, initial estimates showed that the majority of economic activities witnessed growth during the third quarter of 2024, and most of the growth was concentrated in the production sectors, compared to the third quarter of 2023.

Iraq

During his reception of representatives of 24 major British companies, Iraqi Prime Minister Mohammed Shia al-Sudani confirmed that reforms were implemented in the customs, taxation, and company registration domains thus enticing foreign companies to invest within Iraq. He also emphasized that the steps of the Iraqi government aimed to create a national industrial base, and that the presence of foreign companies with the private sector will create real opportunities. To bolster his argument, Iraqi Prime Minister Mohammed Al-Sudani explained that Iraq has a general investment budget for three years, 2023, 2024, and 2025, of which $100 billion has been allocated to the investment budget for ministries and governorates. Nevertheless, he did point out that there is an additional need to implement reforms in the banking and financial sector, so that all financial transfers are carried out through a direct transfer system through international intermediary banks subject to auditing by specialized companies. From his end, the Prime Minister's Advisor for Financial Affairs, Mazhar Muhammad Salih, confirmed that the Iraqi economic path is moving in the right development direction for the coming years, while indicating that economic growth in 2024 constitutes an incentive to expand economic activities in Iraq. He pointed out that the government program succeeded in controlling financial diversity in the general budget and the national economy in general, and explained that the approach to financial policy contributed to regulating the liquidity of the general budget and stabilizing the economy. He also noted that this approach will continue throughout 2025 by contributing to deepening the circle of consultation and close cooperation with the Central Bank and adopting its monetary policy in regulating the liquidity of the general budget and the stability of the macro-economy.

Lebanon

President Joseph Aoun (L) and PM Nawaf Salam in a meeting to discuss how they are going to proceed. Photo Credit: This is Beirut.

2025 started with two spectacular events that allowed the Lebanese to believe that there just might be hope of a better future. First, came the election of Army Commander Joseph Aoun as President of the republic and the consequent election of Mr. Nawaf Salam as Prime Minister. Both individuals ascertained that Lebanon is determined to carry out the necessary reforms in accordance with what was announced in the swearing-in speech, and one of the new government’s first immediate tasks is to prepare the necessary texts for reforms in various fields. Also, it was determined the priorities for the next phase will be that of reconstruction and reactivating the work of government offices, especially those concerned with providing services to citizens. To do so, it will be important to develop the Lebanese administration and adopt electronic technologies to facilitate transactions.

Once the news of the positive developments broke out, Arab investors suddenly became interested in investing in Lebanon. This is because both candidates did not come from the corrupt cast and have strong international backing to finally turn things around in the country. Even the World Bank affirmed that it will stand by Lebanon to help it in this difficult time and in the transitional phase, in order to enable it to rebuild and advance, and to ensure that the prosperity of the entire Lebanese people is supported, without exception. For this reason, it stressed the importance of working in an appropriate environment to carry out reforms, which could help with more private sector investment in Lebanon and look to more appropriate frameworks for revival and construction.

Nevertheless, up until January 31, a new government is yet to be formed as political deadlocks have once again shown their ugly face. Currently, there are fears that critical ministries will be given to the same entities that did not assist in bringing the country forward. As a result, some investors have admitted reluctance in taking another step in Lebanon, if such an important issue addressed. Most probably, there will be revelations in February.

Palestine

Hundreds of thousands of Palestinians made their way back to Northern Gaza. Photo credit: theguardian.com

For the time being the fighting in Gaza has ended and the exchange of hostages began. With the cessation of hostilities 300,000 Palestinians return to Northern Gaza just to be discover widespread destruction and limited resources. The United Nations has warned of the dire situation on the ground as returning residents face significant challenges. While they look to rebuild their lives, the majority of residential areas in the strip have been reduced to rubble. In addition, relief agencies are finding it difficult to respond to the basic needs of the massive numbers of displaced people coming back to the area. To make matters worse, the Palestinian economy looks in very bad shape as Palestine faced an economic, social, humanitarian, environmental, health, educational and food catastrophe that led to the contraction of its ability to be productive. Moreover, its economic structure has been radically altered as many institutions have been wiped out of the map. By the end of 2024, estimates indicated that the unprecedented sharp contraction in the GDP in the Gaza Strip would continue by more than 82%, accompanied by a rise in the unemployment rate to 80%. This decline also extended to the West Bank economy by more than 19%, with the unemployment rate rising to 35%. Ultimately, this led to a decline in the Palestinian economy by 28%, accompanied by an increase in the unemployment rate to 51%. In other words, Palestinians will have a hard time to rebuild Gaza and their economy, provided that the ceasefire will hold in place and lasting peace will not be breached. If the cease fire carries economists agree that the GDP should increase by 19.6% during the year 2025 compared to the year 2024. The per capita share should also increase by 16.9%, and the total consumption (private and public) by 24.6%, compared to the year 2024.

Syria

Syrian markets started to rejuvenate with the beginning of the year, after the former regime had imposed strict restrictions for decades. Money changers and sellers of fuel and diesel cans have spread across many squares and streets of the Syrian capital, taking advantage of what experts consider to be “chaos” in the economic cycle during the transitional phase. Foreign goods which were previously hidden away started appearing for display in stores. Although traders are now able to sell whatever they want whenever it is available, some of them complain about the lack of discipline in the markets. According to France Press, the new economic model which has not yet crystallized, is a continuation of the old model, to which has been added a state of free market economy, meaning that there are no controls, and it is a “mixture of economic chaos". The Minister of Economy in the transitional government, Basil Abdul Hanan, claimed that the economy in the coming Syria will be free and competitive, with the implementation of policies to protect the local product, to focus on the industrial sector and support it greatly and to stimulate it. Moreover, emphasis on supporting and protecting the agricultural sector is another subject which the minister mentioned. However, for the time being, the authorities have not yet specified their economic measures, except for limited steps, including imposing customs duties on cars. After all, the previous regime left a heavy legacy, and the biggest challenge that future governments will face, is the challenge of financing development and reconstruction.

Cyprus

As the region stabilizes with the decrease in armed conflict and tensions, the island looks forward to tap into tourism markets especially when 2025 will be the year Cyprus will be technically ready to join the Schengen area within 2025. For this reason, a conference called “Transforming Cyprus into a Year-Round Destination” in which it was discussed developments in Cyprus’ tourism industry and the need to focus on new markets and year-round growth strategies. During the conference, it was mentioned that there are plans to attract further investment and tourists from the US. On expanding into new tourism markets, it was mentioned that Cyprus is opening embassies in Kazakhstan and Armenia and highlighted Poland’s growth as the second-largest market for Cyprus after the UK, a significant rise from a decade ago. Another positive development that is to boost Cyrpus ‘s economy in light of the stabilizing region is the Tripartite summit between Egypt, Cyprus and Greece which saw the signing of a new agreement to establish a joint business council between the three countries. The aim of such a move is to enhance tripartite cooperation and increase the volume of trade exchange and joint investments especially in green economy and renewable energy projects, such as solar and wind energies and green hydrogen. All of this should capitalize on the impressive successes Cyprus has been achieving throughout the past years. Moreover, this should provide the Cypriot government with increased revenue should it want to go ahead in increasing its spending cap for this year and sustain a growing GDP. After all, Cyprus is continuously trying to appear as ‘model economy’ within the EU.

4. The Humanitarian Situation

Egypt

According to UNHCR Egypt, as of January 2025, there are 877,000 refugees and asylum seekers registered with UNHCR in Egypt, nearly three times the number from a year and a half ago with major conflicts across its borders. Due to the increased numbers, Egypt drafted a new asylum law. [1]

Jordan

The UNHCR states that there are currently 611,473 registered refugees in Jordan up until the beginning of January.

The proportion of Syrian displaced people registered within the UNHCR for the beginning of January, are distributed as follows:

-181,538 in Amman Governorate (29.7%)

-156,964 in Mafraq Governorate (25.7%)

-119,473 in Irbid Governorate (19.5%)

-91,205 in Zarqa Governorate (14.9%)

-15,727 in Balqa Governorate (2.6%)

-12,248 in Madaba Governorate (2%)

-7,964 in Jarash Governorate (1.3%)

-7,830 in Karak Governorate (1.3%)

-8,265 in Maan Governorate (1.4%)

-5,135 in Ajlun Governorate (0.8%)

-3,821 in Aqaba Governorate (0.6%)

-1,265 in Tafilah Governorate (0.2%)

-274 in other (0.0%)

In January, Jordan noted that more than 22,000 people have entered Syria through its territory, 3,100 of whom were registered refugees.[2]
The Ministry of Water and Irrigation (MWI), the Embassy of Japan in Jordan, Japan International Cooperation Agency (JICA) and UNOPS marked the completion of the “Program for Urgent Improvement of Water Sector for the Host Communities of Syrian Refugees in Northern Governorates in Jordan. [3]

Iraq

The UNHCR states that there are currently 338,138 registered refugees in Iraq. Of those, 90,975 live in camps.

The proportion of refugee people (non-camp) registered within the UNHCR up until the beginning of January, are distributed as follows:

-122,102 in Erbil (49.4%)

-40,859 in Dahuk (16.5%)

-32,235 in Sulaymaniyah (13.0%)

-2,482 in Ninewa (1%)

-31,104 in Baghdad (12.6%)

-3,829 in Kerbala (1.5%)

-3,644 in Najaf (1.5%)

-2,529 in Kirkuk (1%)

-2,319 in Anbar (0.9%)

-17,792 in other areas (5.56%)[4]

Syrian refugees living in Domiz Refugee Camp in northern Iraq’s Duhok city expressed their joy over the fall of Syria’s regime but said they cannot return home due to insecurity and instability in regions occupied by militias.[5]
Internally Displaced Persons (IDPs) returning to the Iraqi city of Sinjar, west of Nineveh Governorate, claimed that they had not received the financial grants of $3,054.99 allocated to those returning.[6]

Lebanon

Since the beginning of January, the number of registered Syrian refugees in Lebanon is 755,426.

Refugees in Lebanon are distributed as follows:

-282,744 in Bekaa (37.4%)

-216,781 in North Lebanon (28.7%)

-172,096 in Beirut (22.8%)

-83,805 in South Lebanon (11.1%)[7]

According to Save The Children, nearly one third of children in Lebanon – 29% - began the new year facing crisis levels of hunger, with some pushed into child labor to support their families.[8]
As of January 15, 2025, 871,859 people displaced within Lebanon reported back in their cadasters of origin. [9]
The Humanitarian Coordinator for Lebanon, Imran Riza, announced a $30 million allocation from the Lebanon Humanitarian Fund (LHF) to address urgent humanitarian needs stemming from the recent conflict and support displaced populations and communities returning to affected areas.[10]
The United Nations and the Government of Lebanon issued a $371.4 million extension of the Lebanon Flash Appeal, aiming to provide life-saving assistance to civilians affected by the recent conflict and the ongoing humanitarian crisis.[11]

Syria

The European Commission declared it will provide new humanitarian aid to Syrians, both inside Syria and in neighboring countries, worth €235 million in 2025.[12]
Following damage sustained during clashes on 10 December, the Tishreen Dam in North East Syria has remained non-operational for over several weeks now, depriving over 413,000 people of water and electricity in the Menbij and Kobani areas. Urgent repairs are required to restore essential services and protect livelihoods.[13]
As part of the ongoing Qatari air bridge to support the Syrian Arab Republic, Qatar Fund for Development dispatched 31 Tonnes of humanitarian aid including food baskets via a Qatar Emiri Air Force aircraft to Damascus International Airport.[14]
UNHCR estimates that more than 125,000 Syrians have returned to the country since the fall of the Assad government one month ago.[15]
The SRTF announced the successful completion of a vital healthcare project in Northern Aleppo, significantly enhancing medical services for underserved communities. With a total actual budget of around EUR 4 million, the project addressed critical gaps in healthcare delivery, benefiting over 201,686 patients.[16]

Cyprus

UNHCR Cyprus declared that 1914 refugee arrivals were detected for the preceding month. They come from Iran, Syria, Somalia, Sudan, and Afghanistan.[17]

[1] OCHA, Jan 19, 2025, https://reliefweb.int/report/egypt/unhcr-egypt-fact-sheet-december-2024

[2] UN, January 2, 2025, https://news.un.org/en/story/2025/01/1158706

[3] OCHA, Dec 26, 2024https://reliefweb.int/report/jordan/successful-completion-crucial-water-programme-support-host-communities-unops-and-jica-jordan-enar

[4] https://data2.unhcr.org/en/situations/syria/location/5

[5] Anadol Agency, January 15, 2025, https://www.aa.com.tr/en/middle-east/syrian-refugees-in-iraq-fear-return-to-homeland-due-to-presence-of-pkk-ypg-terror-group/3450598

[6] Middle East Monitor, January 20, 2025, https://www.middleeastmonitor.com/20250120-iraq-stopping-govt-grants-hindering-return-of-sinjar-idps/

[7] UNHCR, Oct 28, 2024, https://data2.unhcr.org/en/situations/syria/location/71

[8] OCHA, Jan 20, 2025, https://reliefweb.int/report/lebanon/lebanon-nearly-third-children-facing-crisis-levels-hunger-country-reels-year-conflict

[9] OCHA, Jan 19, 2024, https://reliefweb.int/report/lebanon/lebanon-flash-update-55-escalation-hostilities-lebanon-16-january-2025

[10] OCHA, Jan 10,2025, https://reliefweb.int/report/lebanon/lebanon-humanitarian-fund-lhf-allocates-30-million-address-urgent-needs-conflict-affected-areas-enar

[11] OCHA, Jan 7, 2024, https://reliefweb.int/report/lebanon/united-nations-and-lebanese-government-announce-3714-million-extended-flash-appeal-address-growing-humanitarian-needs-enar

[12] OCHA, Jan 20, 2025, https://reliefweb.int/report/syrian-arab-republic/lue-fournit-235-millions-deuros-daide-humanitaire-aux-syriens

[13] OCHA, Jan 20, 2025, https://reliefweb.int/report/syrian-arab-republic/syria-escalation-hostilities-northeast-syria-dg-echo-partners-nes-forum-local-media-reports-echo-daily-flash-20-january-2025

[14] OCHA, Jan 13, 2025, https://reliefweb.int/report/syrian-arab-republic/qatar-fund-development-dispatched-31-tonnes-humanitarian-aid-damascus-support-brotherly-syrian-people-9-jan-2025-enar

[15] OCHA, Jan 10, 2025, https://reliefweb.int/report/syrian-arab-republic/unhcr-regional-flash-update-9-syria-situation-crisis-10-january-2025

[16] OCHA, Jan 7, 2025, https://reliefweb.int/report/syrian-arab-republic/successful-completion-healthcare-project-northern-aleppo-transforming-lives-underserved-communities

[17] OCHA, Dec 21, 2024, https://reliefweb.int/report/cyprus/cyprus-monthly-arrivals-snapshot-december-2024

2025 Begins

Middle East Socioeconomic Overview

Report: January 2025

1. Table of Acronyms

2. Introduction

3. The Socio-Economic Situation

Egypt

Jordan

Iraq

Lebanon

Palestine

Syria

Cyprus

4. The Humanitarian Situation

Egypt

Jordan

Iraq

Lebanon

Syria

Cyprus

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The Secretary General of the Middle East Council of Churches, Professor Michel Abs, sends Condolences to H.H.

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