Corporate treasury teams in the Middle East have discussed at an ACT conference how best to navigate an economic landscape shaped by inflationary pressures, shifting trade dynamics and geopolitical transformation. At the ACT Middle East Treasury Summit 2025 in Dubai, Simon Ballard (pictured above), chief economist at First Abu Dhabi Bank, described the current climate as one of “complicated crosswinds,” where monetary policy, consumer behaviour and structural inflation collide.
He noted: “[Last month], the [US] Federal Reserve announced a 25-basis point rate cut – the first of the year. Many expected a hawkish cut, acknowledging underlying inflation,” which eased up in the US to 2.9%.
“Instead, the Fed emphasised labour market weakness and hinted at further easing,” said Ballard. Markets had priced in two additional US rate cuts by year-end, he said, but just 20 minutes afterwards, Fed chair Jerome Powell warned against igniting inflation, “prompting markets to reassess”.
Ballard added that the world (including the Middle East) is in a monetary easing environment within a slower growth backdrop. With global growth in 2024 estimated at 3.3%, he cautioned that structural inflation remains a challenge: “I believe inflation is being misrepresented and misunderstood. The full impact of tariffs introduced under President Trump has yet to be felt.
“These levies, applied at the point of US import disembarkation, will begin to affect consumer spending and corporate margins more visibly by 2026.”
The real story of 2025 is one of resilience and a shifting global balance – emerging markets are not just driving local economies but reshaping the global stage
Treasury teams must also adapt to changing consumer and travel trends, the conference heard, looking out for growth hotspots in emerging markets, which may thrive despite global economic complexity. As inflation reshapes purchasing power and intra-regional tourism rebounds, agile liquidity management and real-time data are essential, said Mohamed Bardastani, principal central/eastern Europe, Middle East and Africa (CEMEA) economist at Visa.
“The real story of 2025 is one of resilience and a shifting global balance – emerging markets are not just driving local economies but reshaping the global stage,” he said. Gulf economies are outperforming pre-pandemic growth, powered by diversification, rising female workforce participation, and ambitious tourism goals. Gulf Cooperation Council (GCC) countries’ GDP is projected by the World Bank to increase to 3.2% in 2025 and 4.5% in 2026.
But to exploit this, treasurers need detailed knowledge of these markets. The Middle East is undergoing a profound transformation, said Dr Elie Al Hindy, associate professor at the American University in the Emirates, cautioning: “If you think you understand the Middle East, it means someone explained it wrong.”
He described the region as a space of conflict and cooperation, instability and innovation, saying that Gulf nations are redefining alliances, moving beyond ideological ties to pursue pragmatic partnerships that serve national interests. Recent threats to trade routes and infrastructure underscore the need for treasury teams to embed resilience into cross-border operations.
If you think you understand the Middle East, it means someone explained it wrong
The Gulf’s strategic recalibration – away from dependence on US protection or appeasement of regional rivals – is reshaping its defence and economic posture: “Gulf countries are diversifying their alliances to whatever and whoever serves their national and economic interests.” So, treasury leaders must monitor emerging fractures and unexpected alignments, which could impact currency exposure, capital flows and regulatory risk.
Crucially, post-oil strategies like ‘Saudi Vision 2030’ and the UAE’s ‘We the UAE 2031’ are driving economic diversification and digital transformation – these national agendas are blueprints for structural reinvention.
Saudi Arabia is investing heavily in fintech, tourism, and green energy to reduce oil dependency and build a globally competitive economy. Meanwhile, the UAE is positioning itself as a hub for innovation, sustainability, and digital finance, with initiatives promoting smart government, AI integration, and inclusive growth.
Emma Procter is a business journalist based in Dubai