Middle East Central Bankers 2025: Economic Resilience & Fintech Drive

The Middle East continues to be a region of significant economic dynamism and strategic importance. In 2025, central bankers across the Gulf Cooperation Council (GCC) and broader Middle East face a complex interplay of global economic shifts, regional geopolitical factors, and an accelerating drive towards digital transformation. This annual report card provides an in-depth analysis of the performance and strategic initiatives undertaken by the region's leading central bank governors, highlighting their efforts in maintaining financial stability, fostering economic diversification, and embracing technological innovation.

The overarching theme emerging from this year's assessments is the region's commendable macroeconomic resilience amidst varying domestic and international pressures. While hydrocarbon revenues remain a cornerstone for many economies, the imperative for diversification is increasingly clear, leading to a strong push towards non-oil sectors and advanced financial services. Furthermore, the rapid adoption of digital finance and supportive regulatory frameworks for fintech are positioning the Middle Eastern financial landscape at the forefront of global innovation.

Bahrain | Khalid Humaidan: B

As the smallest economy within the GCC, Bahrain has demonstrated remarkable stability, with GDP growth anticipated at 3.5% this year and inflation projected to remain under 1%. The Central Bank of Bahrain (CBB), under Governor Khalid Humaidan, maintains a monetary policy closely aligned with the US Federal Reserve, due to the Bahraini dinar's peg to the dollar. Following the Fed's September rate cut, the CBB appropriately lowered its overnight deposit rate by 25 basis points to 4.75%. The World Bank, while acknowledging the peg's suitability, has cautioned about potential tighter financial conditions stemming from trade-related inflationary pressures and global supply chain disruptions.

Bahrain pioneered economic diversification in the Middle East, with its financial sector being a pivotal component of the non-oil economy. Manama hosts some of the region's oldest and largest banks. Governor Humaidan, with his background in global markets and economic development, actively promotes the adoption of new technologies among lenders to expand market share. Notably, the CBB made headlines in July by becoming the first Gulf regulator to introduce comprehensive rules for stablecoins, underscoring its commitment to financial innovation. While Bahrain actively collaborates with GCC counterparts to enhance cross-border transactions and integrate payment systems, challenges persist, particularly concerning public debt, projected to reach 144% of GDP by 2028, and a continued reliance on regional financial support.

Iraq | Ali Mohsen Al-Alaq: B-

Iraq's economy is poised for recovery in 2025, following two consecutive years of recession, primarily driven by a resurgence in oil production. The nation's substantial reliance on hydrocarbons, accounting for 95% of government revenue, exposes it to significant vulnerabilities from global oil price volatility. Governor Ali Mohsen Al-Alaq of the Central Bank of Iraq (CBI) has championed a strategy of "developmental central banking," aiming to channel credit towards strategic non-oil sectors such as agriculture and industry, thereby broadening the country's economic foundation. Price stability remains a paramount objective, evidenced by the reduction in inflation to 3.8% in 2024 from 7.5% the preceding year. Concurrently, the CBI reduced its policy rate from 7.5% to 5.5% to stimulate credit growth and bolster economic recovery.

A key focus for Al-Alaq is the modernization of Iraq's underdeveloped banking system. This includes reforms for state-owned banks and initiatives to diminish the prevalence of cash transactions. In May 2024, new regulations for digital banks and electronic payment companies were enacted, facilitating the entry of new market participants. Despite ongoing efforts to combat money laundering and terrorism financing, the CBI continues to grapple with severe compliance issues. Restrictions on dollar transactions for several Iraqi banks due to concerns over illicit financial flows to sanctioned entities highlight these challenges. In response to a recently uncovered scheme involving prepaid Visa and Mastercard products used to funnel money to Iran-backed militias, the CBI imposed stringent caps on monthly cross-border transfers and individual cardholder transactions.

Jordan | Adel Al-Sharkas: B+

Despite its tumultuous regional surroundings, Jordan has exhibited remarkable macroeconomic resilience, achieving 2.5% GDP growth in 2024, with similar projections for 2025. Governor Adel Al-Sharkas of the Central Bank of Jordan (CBJ) has steadfastly prioritized maintaining price stability and preserving national purchasing power. The Jordanian dinar's peg to the dollar dictates that the CBJ's monetary policy closely mirrors that of the Federal Reserve. A September rate cut brought Jordan's main policy rate to 6.25%. Inflation has notably decreased to 1.6% in the previous year and is expected to hover around 2% in 2025. Jordan's banking sector stands out for its robustness, strong capitalization, and resilience against external shocks, marked by healthy growth in deposits and credit in 2024.

The IMF commended Jordan's banking sector in July, noting the central bank's efforts in strengthening systemic risk analysis, financial oversight, and crisis management. The kingdom is actively pursuing fiscal and economic reforms to enhance its business environment. The CBJ's National Financial Inclusion Strategy for 2028 signifies a concerted effort to foster sustainable growth and modernize the banking sector through public-private collaboration. However, Jordan continues to rely heavily on external financial assistance, and with public debt exceeding 90% of GDP, the long-term management of fiscal sustainability remains a critical challenge.

Kuwait | Basel Al-Haroon: B

Kuwait's economy remains profoundly tethered to hydrocarbon sales, which constitute 90% of its revenues, making its economic performance highly sensitive to global oil prices and production volumes. Following a 2.6% contraction in 2024, GDP is forecast to achieve a modest 1.9% growth this year. Since his appointment in 2022, Governor Basel Al-Haroon of the Central Bank of Kuwait (CBK) has implemented a gradual tightening of monetary policy, culminating in a cumulative 275 basis point increase in the main policy rate to 4.25% by July 2023. A subsequent, modest cut in September 2024 adjusted the rate to 3.75%, reflecting the CBK's "gradual and balanced" approach aimed at managing inflation without stifling economic growth.

Distinguishing itself from other GCC central banks, Kuwait pegs its currency to an undisclosed basket of goods rather than directly to the US dollar, a framework endorsed by the IMF as an "appropriate nominal anchor." The IMF has also affirmed that the CBK's policy rate is appropriately calibrated to control inflation, stabilize non-oil output, and support the exchange rate. Kuwait's financial sector, a cornerstone of its non-oil economy, remains robust, characterized by strong capital and liquidity buffers and low levels of non-performing loans, attributable to prudent lending practices and robust provisioning. In a forward-looking move, the CBK released a draft framework for open banking regulation in June 2025, aiming to stimulate collaboration between fintech innovators and traditional banks to cater to the evolving demands of its young, technologically adept population.

Lebanon | Karim Souaid: Too Early To Say

After enduring six years of an unprecedented financial, monetary, and economic crisis, marked by a 99% depreciation of the local currency and triple-digit inflation, Lebanon appears to be on the cusp of a potential recovery. Despite the devastating impact of the conflict between Israel and Hezbollah on parts of the country, a significant political breakthrough in early 2025 has paved the way for a new ruling team to enact critical reforms, which are essential to unlocking a much-needed support package from the IMF. Karim Souaid, appointed Governor of the Banque du Liban (BDL) in March 2025, faces the monumental task of completely restructuring the banking sector and rebuilding trust in an institution severely eroded by past governance issues.

The arrest and impending trial of his predecessor, Riad Salameh, on charges of embezzlement and money laundering, underscores the depth of the challenges. Nevertheless, crucial initial steps towards reform have been taken, including Parliament's lifting of banking secrecy in April and the passage of a bank resolution law in July, designed to facilitate restructuring. Anticipation of consolidation among lenders, and even outright closures, is high. The next critical legislative hurdle is a gap-resolution law to determine the allocation of losses for the sector's estimated $80 billion deficit. Governor Souaid's inaugural pledge to "gradually return all bank deposits, starting with small savers as a priority," sets a clear expectation for his tenure, placing all eyes on his leadership and the new government's reform agenda.

Oman | Ahmed Al-Musalmi: Too Early To Say

Oman is actively pursuing an ambitious economic transformation, though its developmental path has historically been less ostentatious than some of its Gulf neighbors. Economic growth is projected to accelerate to 3% in 2025, a notable increase from 1.7% in 2024, propelled by both augmented oil revenues and robust performance in the non-oil economy. In a strategic move to attract foreign investment and stimulate domestic demand, particularly in real estate, Oman introduced a Golden Visa program in August, making it the last GCC country to do so. Concurrently, the banking sector has experienced significant expansion over the past decade, more than doubling in size, which introduces both opportunities for financial innovation and increased regulatory complexities.

Governor Ahmed Al-Musalmi assumed leadership of the Central Bank of Oman (CBO) in December. His extensive background includes serving as CEO of the National Bank of Oman and subsequently as CEO of Bank Sohar. In 2023, Al-Musalmi notably oversaw the successful merger of Bank Sohar and HSBC Bank Oman, a consolidation that led to the creation of Sohar International, which now stands as the second-largest lender in the country. Given the expectation of further bank mergers and acquisitions in Muscat, Al-Musalmi's expertise in this domain is likely to be swiftly tested. However, it is premature for a definitive assessment of his performance at this early stage of his governorship.

Qatar | Bandar bin Mohammed bin Saoud Al-Thani: B

As one of the world's wealthiest nations by GDP per capita, Qatar anticipates a solid 2.4% economic growth this year, with an impressive surge to over 6% projected for 2026, driven by the anticipated doubling of liquefied natural gas (LNG) production from the North Field Expansion. Inflation remains effectively contained at approximately 1%, supported by robust purchasing power that fuels domestic demand. The Qatari riyal's peg to the US dollar dictates that the Qatar Central Bank (QCB), under Governor Bandar bin Mohammed bin Saoud Al-Thani, closely aligns its monetary policy with that of the US Federal Reserve. In September, Doha preemptively cut key rates, setting the deposit rate at 4.35%, the lending rate at 4.85%, and the repo rate at 4.6%.

Governor Al-Thani, who also chairs the formidable Qatar Investment Authority, overseeing a $450 billion sovereign wealth fund, supervises a dynamic banking sector comprising eleven local and several international lenders, all integral to the country's ambitious economic transformation. S&P's recent assessment highlights the profitability, strong capitalization, and adequate liquidity of Qatari banks, while also noting external debt and potential capital outflows as areas requiring prudence. With major infrastructure projects nearing completion, external funding requirements are easing. Looking ahead, Qatar aims to attract $100 billion in foreign direct investment by 2030, supported by new pro-business legislation introduced in January, encompassing bankruptcy, public-private partnerships, and commercial registry reforms. The QCB is also actively promoting Qatar as a hub for financial innovation through initiatives like the Qatar Fintech Hub, in collaboration with the Qatar Development Bank and the Qatar Financial Centre.

Saudi Arabia | Ayman Al-Sayari: B+

Saudi Arabia, the Middle East's largest economy, has largely maintained its stability amidst regional geopolitical tensions and global trade disruptions. Growth is projected at 3.5% this year, with inflation expected to remain low at 2%. In line with many of its GCC counterparts, Saudi Arabia pegs its currency to the US dollar, a policy that the IMF, in its latest Article IV review, deems "appropriate." Following the Federal Reserve's decisions, Governor Ayman Al-Sayari of the Saudi Central Bank (SAMA) implemented a 25 basis point cut in September, adjusting the repo rate to 4.75% and the reverse repo rate to 4.25%. These eased borrowing costs are strategically aimed at stimulating investment across diverse sectors of the economy.

Saudi banks recorded exceptional profits in 2024, achieving an average return on assets of 2.2%, while non-performing loans (NPLs) reached their lowest levels since 2016. However, robust double-digit credit growth, largely driven by corporate lending and mortgages, has outpaced deposit growth, creating some funding pressures. To address this, banks have increasingly resorted to external borrowing, leading to negative Net Foreign Assets (NFA) for the first time since 1993. Despite these pressures, Riyadh boasts one of the world's lowest public debt levels, underpinned by substantial oil revenues, ample foreign reserves, and a conservative fiscal policy. The IMF has commended SAMA's continuous efforts to enhance its regulatory and supervisory frameworks. The kingdom continues to attract international banks, eager to establish a presence in the region and align with global best practices, with a new Banking Law anticipated in the near future.

United Arab Emirates | Khaled Mohamed Balama: B+

The United Arab Emirates (UAE) continues to deliver a robust economic performance, with GDP growth anticipated at 4.4% this year and inflation effectively contained at 2%. The UAE dirham's peg to the US dollar means the Central Bank of the UAE (CBUAE), under Governor Khaled Mohamed Balama, largely mirrors US monetary policy. After three rate cuts in 2024, the CBUAE further lowered its overnight deposit facility rate to 4.15% in mid-September, reflecting a responsive approach to economic conditions.

Concentrated primarily in Dubai and Abu Dhabi, the UAE's banking sector stands as a regional powerhouse. In 2024, banking assets surged by 12% to an impressive $1.24 trillion, accompanied by record profits and an exceptional return on average equity of 19.1%, according to Fitch. A stable loan-to-deposit ratio of 76% signals strong liquidity and ample credit capacity. Emirati banks are actively expanding their regional and international footprints, particularly in Asia and Africa; for instance, Emirates NBD secured regulatory approval in March to acquire a stake in Banque du Caire, Egypt's sixth-largest lender. Governor Balama, a long-serving figure at the CBUAE since 2008, oversees a rapidly growing and diversified financial ecosystem that encompasses traditional banks, numerous fintech firms, and non-bank institutions. For over a decade, the UAE has been a leading force in digital finance, pioneering sectors such as blockchain, cryptocurrencies, and artificial intelligence (AI). In July, the CBUAE launched a joint venture with Presight, an AI company, aimed at enhancing financial services nationwide. Governor Balama is also a fervent advocate for green finance, strategically aligning technological innovation with the nation's long-term sustainability objectives.