Tourism is a powerful engine of economic growth, cultural exchange, and global connectivity, playing an increasingly pivotal role in shaping the future of many regions.

The Mastercard Economics Institute’s recent “Economic Outlook 2025” report forecasts a modest global GDP growth of 3.2% next year.

The report forecasts that the UAE’s GDP will grow by 5% year-on-year in 2025, surpassing global economic growth rates. Saudi Arabia is also projected to outperform global averages, with GDP growth estimated at 3.7% in 2025. 

Consumer spending in KSA is expected to rise by 4.5%, while inflation is likely to remain moderate at 2%. This growth is driven by robust non-oil economic activity and government investments aligned with Vision 2030.

Government investments in infrastructure and easing interest rates are set to bolster private sector investment, employment, and domestic consumption. Population growth remains a key driver of private consumption, further energizing economic momentum.

Tourism is expected to remain a major contributor to regional economies, with Saudi Arabia benefiting from its expanding leisure and entertainment offerings. Spending on experiences in KSA soared by 451% in February 2024 compared to 2019, and by 326% as of September 2024, fueled by large-scale events and enhanced tourism infrastructure.

Migration has also strengthened the region’s human and financial capital. Between 2019 and 2023, net migration accounted for 4.4% of Saudi Arabia’s population growth.

The global economy has shifted from the ‘great resignation’ to the ‘great return,’ with notable workforce growth among younger workers and women. In Saudi Arabia, women’s workforce participation rose from 18% in 2017 to 34.5% in 2023, driven by Vision 2030 reforms easing social restrictions and creating opportunities.

Factors such as job growth in female-dominated sectors like healthcare and education, alongside the rise of remote work, have also contributed. These trends are expected to boost disposable incomes and drive consumption growth through 2025.

Global inflation eased considerably in 2024, thanks to declining prices for durable goods and slower inflation for nondurable goods. While some risks to goods pricing remain, moderating wage growth is likely to temper inflation in the services sector. The report forecasts trimmed global inflation to 3.2% in 2025, reflecting a more stable economic environment.