On the evening of August 18, phones across the UAE lit up with an emergency alert. The Ministry of Defence later confirmed that two ballistic missiles had been launched from Iran towards the country, one falling outside territorial waters and one inside.

It was the first such warning in over a month, and it landed a day after the 14-point memorandum of understanding (MoU) between Washington and Tehran expired with no successor agreement in place.

By the next morning, Abu Dhabi had imposed an indefinite trade embargo on Iran. Tehran had denied firing anything at all. A Shakira concert in the capital was cancelled along with the festival built around it.

That is the backdrop against which Dubai is currently asking its residents to invite their relatives over for a holiday.

Launched on July 20 by the Department of Economy and Tourism, A Dubai Invite offers UAE citizens and residents a package of hotel, dining, and attraction benefits worth more than AED 3,000, or roughly USD 800, if a nominated friend or family member arrives in the emirate on a tourist visa before October 31. Residents can claim up to three packages.

The perks remain valid until the end of the year. It is a referral scheme, essentially, of the kind a challenger bank might run to grow its deposit base, and it is being deployed by a destination that welcomed 19.59 million international overnight visitors in 2025, its third consecutive record year.

What actually happened to the numbers
Dubai hotels ran at 84.7% occupancy in February before the US and Israel struck Iran on February 28, and Iran began retaliating against American allies across the Gulf.

In the war’s first six weeks, more than 530 ballistic missiles, dozens of cruise missiles, and over 2,200 drones were directed at the UAE. Within 48 hours of the opening strikes, hotel booking cancellations across Dubai were running at 60%, and more than 80,000 short-term rental bookings went in the first week alone.

By mid-March, occupancy in Dubai had bottomed out at 19.6%. CoStar recorded 33.1% for the month as a whole, a fall of 54.4% year-on-year, with the Emirates-wide figure at 36.2%. The World Travel and Tourism Council put the cost to the wider Middle East at USD 600 million a day in lost visitor spending, roughly USD 180 million of it attributable to the UAE.

The damage did not stay in the hospitality accounts. Real estate transaction volumes fell 37% year-on-year during the first twelve days of March, and 49% against February, on Goldman Sachs figures.

A downgrade of nearly four percentage points by the institution with the best view of the domestic data is not a rounding adjustment. It is an admission that the disruption is not confined to a bad quarter in the hotel trade.

The same report pencils in a rebound to 9.8% in 2027, which tells you how the authorities are framing this. The loss is being treated as deferred rather than destroyed, a hole that fills in once the shooting stops.

Why the recovery is stuck in the middle
The first-half hotel data shows a market that has come off the floor without returning to anything like normal. UAE-wide occupancy fell nearly 28 percentage points year-on-year through June, with revenue per available room down 31.8%, on CBRE analysis of CoStar data.

Dubai took the worst of it, with occupancy down 24.6 points to 56.4% and RevPAR off 35.2%. Average daily rates slipped 7% to AED 701. After the Eid spike, June settled back into the high forties and low fifties.

Abu Dhabi saw occupancy fall only 13.5 points and RevPAR 20.3%, cushioned by domestic and regional demand, and a fixed events calendar. The split is instructive. Dubai’s model, built on long-haul arrivals and transit traffic, is the one most exposed to airspace closures, insurance exclusions, and nervous consumers eight time zones away.

Meanwhile, the quiet closures continue. Several landmark properties have shut for extended refurbishment, including Anantara World Islands and the Burj Al Arab, the latter for an estimated 18 months of capital work.

None has publicly linked the timing to the war. Taking rooms out of a market with no demand is sound asset management. It is also, unmistakably, a supply response to a demand shock.

The honest position
The UAE has the fiscal depth to absorb a bad year without distress, a diversified non-oil base that is still growing, and a genuine record of recovering from regional shocks with prices and volumes higher on the far side.

GlobalData expects UAE international arrivals to fall about 12% this year to 26.4 million before rebounding to 32.1 million in 2027. Dubai is targeting a return towards 19.6 million visitors, and betting heavily on the winter season and on projects such as the USD 3.9 billion Wynn resort at Al Marjan Island in 2027.

But a forecast is not an observation. Every recovery scenario now being briefed rests on de-escalation, and this week, that assumption looked thinner than it has since May. The memorandum has lapsed, the naval blockade is in force, Tehran says its posture has shifted from defensive to offensive, and missiles were fired towards the Emirates again.

The dichotomy, then, is not really between a struggling economy and an optimistic government. It is between a balance sheet that can wait and a business model that cannot. Sovereign wealth buys time. It does not buy a ceasefire, and it does not persuade a family in Manchester or Melbourne to book a beach holiday under a Level 3 advisory.

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GDP, or Gross Domestic Product, is simply the total value of everything a country produces: goods and services combined. When GDP grows, it generally means more jobs, higher incomes, and better living standards.

Spain’s 2025 performance gives grounds for optimism. Growth that year came in at 2.8%, driven largely by strong domestic spending. This means Spanish households and businesses were buying and investing more, even as exports faced headwinds from rising imports. That figure has since been revised upward to 2.4% for the full year, still well ahead of its European peers.

Unemployment, one of Spain’s most persistent challenges, is expected to fall to 9.7% in 2026, down from 12.2% as recently as 2023. Fewer people out of work means more people earning and spending, which in turn keeps the economy moving. The public debt-to-GDP ratio, a measure of how much the government owes relative to what the economy produces, is projected to fall to 99.3%. The annual deficit is hovering near the 3% threshold set by EU fiscal rules.

The IMF agrees with the positive assessment, forecasting Spain will lead eurozone growth at 2.1% in 2026, with inflation averaging around 3%. CaixaBank Research, one of Spain’s leading financial institutions, has similarly revised its 2026 forecast upward to 2.1%, following strong data from the fourth quarter of 2025.

Two structural factors underpin Spain’s resilience. Namely, a robust services sector, particularly tourism, and a steady influx of working-age immigrants that is expanding the labour force and consumer base. Together, these dynamics give Spain a cushion that most of its European neighbours currently lack.

The post Spain bucks Eurozone trend with solid 2.2% economic growth forecast for 2026 appeared first on International Finance.

The 2012-13 bailout had left its scars. There were bank haircuts, capital controls, and a new international infamy for economic secrecy. From Riga to Rome, every finance minister complained about the plight of its smaller neighbour and included a mention of “Cyprus” in their geopolitical shorthand.

Fast-forward to 2026, and the footnote has become a case study. The recent update to the real GDP growth forecast sees the pace of expansion slowing to 3.1% this year from 3.8% in 2025. Yes, it is slower than the previous year, but still remarkable for a nation to pull off during all this geopolitical volatility.

Take the latest data, for example. In Q4 2025, Cyprus’ economy expanded 4.5% on a year-on-year basis, up from 3.6% in the previous period. The milestone also marked the strongest economic expansion since Q4 2022, with the main drivers being the wholesale and retail trade, repair of motor vehicles, information and communication, and hotels and restaurants (+7.2%). Construction also recorded strong growth, rising 9.2%, while manufacturing increased by 4.7%.

In another piece of good news, tourist inflows (which skyrocketed to €3.7 billion in 2025) from the United Kingdom, Germany, Poland, Israel, Greece, France, and Sweden played a solid hand in propelling Cyprus to its historic GDP growth, while the Mediterranean island emerged as one of Europe’s most sought-after destinations. The boom also benefited the airline and hospitality industries, with airlines like British Airways, easyJet, and Ryanair expanding their services to accommodate the ever-growing number of visitors. Hotels and resorts in the island region, on the other hand, responded by ramping up their offerings, from luxury accommodations to eco-friendly resorts, ensuring a diverse range of options for all types of travellers.

Remarkable fiscal story

In 2025, Cyprus recorded a budget surplus of €939.2 million. Let that sink in for a moment. We are talking about a small island country with its own unique set of problems and challenges. The country is located in a volatile region, subject to tensions between Greece and Turkey. There are also costs associated with meeting EU targets for reducing carbon emissions and the costs of bringing salaries for government workers in line with those in the private sector. The employee salaries peaked at €4.13 billion in 2025. And yet, a budget surplus of €939.2 million was still recorded.

The ceiling for next year’s state budget is €10.7 billion, or €11.3 billion without interest costs. It is a political and economic price that was set with considerable care. In a eurozone periphery country such as Cyprus, this is something seen rarely and achieved even more rarely, as the fiscal discipline required is not always accompanied by the same degree of political consensus. The fiscal leeway was available, but action only followed as the debt crisis escalated and a new government came into power at the end of 2023, when public debt was at 73.6% of GDP. Now it is projected to fall to 52.9% of GDP by the end of 2026. This is no small reduction. It is a reduction of a historical and almost revolutionary character.

According to Cyprus’ Deputy Finance Minister Irene Piki, “Multi-year planning, more predictable policy, and fiscal space earned through responsible and reform-based ways rather than increased borrowing ensures high household, business, and investor confidence.”

She is right. And the timing of this issue must also be taken into consideration. With the war in Ukraine, energy-price volatility, and the costs of achieving the EU’s ambitious climate and digital agendas, Europe’s overall fiscal situation is extremely difficult. Most member states are feeling the strain, though a few, such as Poland, are coping better than expected. Others, like Bulgaria and Slovenia, will hardly notice any short-term impact from the EU’s fiscal rules for the next few years.

Cyprus is not in this group, but it will no longer be in the minority either. It will assume the EU Council presidency in the first half of 2026, at a time when all other member states with higher budget deficits will be trying to keep a low fiscal profile in advance of a potential EU debt-mutualisation discussion, while others will be more than happy to oblige by not questioning the fiscal prudence of the presidency. Cyprus’s economic model, which has proven itself in recent years to be sustainable despite high inflation and even though the country is heavily indebted, should attract worldwide attention during its presidency and generally face appreciation for its achievements.

The tech revolution

Here’s an honest take. Tourism is the story that gets the headlines, but tech is stealing the show, and that’s where the smart money is heading.

By the end of 2025, Cyprus’s Information and Communications Technology (ICT) sector contributed roughly 16% to national Gross Value Added (GVA). That is approximately €8.5 billion. The island now ranks second in the EU for ICT’s share of national GVA, ahead of economies with ten times the population and four times the infrastructure investment. The workforce in tech has more than tripled over the past decade, now exceeding 26,000 professionals. Cyprus ranks fifth in the EU for GVA per ICT employee. In productivity, in other words, not just headcount.

The talent pipeline is being deliberately engineered. Non-resident professionals earning over €55,000 annually get a 50% income-tax exemption. There is also a Digital Nomad Visa and streamlined residency for spouses of international workers. The type of person this attracts is mobile, high-earning, plugged into global networks, and likely to bring their employer with them or start something new once they are settled. In March 2026, the Research and Innovation Foundation sent a national pavilion to the 4YFN summit in Barcelona, showcasing eight companies in AI, robotics, and agritech. One Cypriot portfolio company, Threedium, was selected as one of only ten firms globally to present on the main NVIDIA GTC 2026 stage. That’s not luck.

TechIsland, the sector’s coordinating platform, has done the unglamorous but essential work of bridging local entrepreneurs with international executives. The ecosystem is self-reinforcing now, which is the point where you stop worrying about whether it is sustainable and start worrying about whether the housing stock can keep up.

What are the key factors helping the country’s tech sector? Let’s start with Cyprus’ geographical location. The Mediterranean island sits at the intersection of Europe, the Middle East, and Africa, giving companies access to huge markets if they prefer using the nation as their manufacturing and R&D hubs. Imagine businesses keen on maximising their prospects in the European market but also want outreach to Israel’s $100 billion tech sector, along with emerging Middle Eastern and North African (MENA) countries, Cyprus can become the base camp. Also, the country’s legal system is rooted in English common law, making it instantly familiar for those used to British or commonwealth standards.

Then comes the 12.5% corporate tax rate, one of the lowest in the European Union (EU). To sweeten things further, there is an “IP Box Regime” that results in qualifying intellectual property income being taxed at an effective rate of just 2.5%. Businesses holding IP in domains like software, AI, fintech patents, or video games get massive leverage for reinvestment and expansion in the Mediterranean island, as taxation remains simplified and pocket-friendly, compared to high-tax countries. The administration is actively courting the cause of the island nation becoming a regional tech hub by backing initiatives such as “Startup Cyprus” and the “Youth Entrepreneurship Scheme.”

Promise of energy utopia

Shipping accounts for more than 7% of the country’s GDP and often receives insufficient attention in debates that focus on new sectors. Now, though, the evidence is plain to see. The shipping sector is a major source of revenue. Cyprus alone accounts for around 4% of the global merchant fleet, while more than 20% of worldwide third-party ship-management activities are carried out from here. The figure for ship-management revenues for the first half of 2025 was €978 million, an increase of 6.7% on the previous quarter.

And that’s a lot of concentration! The top 27% of the companies account for 85% of total sales. Germany and Greece are the number one and two trading partners, respectively, accounting for 30% and 13% of sales.

In November 2023, the One-Stop Shipping Centre was established, which currently serves more than 300 shipping companies benefiting from the tonnage-tax regime. Almost all shipping companies based in Cyprus benefit from this, apart from the four historical ship-owning companies, which, in accordance with the current tonnage-tax legislation, are not allowed to gain an advantage through the new policies.

The overall gross tonnage of the Cyprus ship registry has increased by 20% over the last two years, reaching the highest level in the last two decades. A real and tangible effort is being made to modernise shipping further through the sponsorship of robotics and digital-technology-related scholarships and the upgrading of the associated educational infrastructure, as well as research into alternatives and new methods to support the greening of shipping. Shipping contributes significantly to the island’s employment sector, both in terms of direct and indirect on-shore employment (over 9,000 people) and the huge number of seafarers (80,000 and more) employed onboard vessels managed by companies based in Cyprus and therefore also indirectly contributing to the economies of the ports of call. Cyprus wants to maintain and further develop this very important sector.

Gas fields have been “coming soon” for years, and one can excuse the sarcasm. But now, for the first time in more than a decade, all indications are that 2026 will actually see the start of production of two giant offshore fields in Eastern Mediterranean gas. The Aphrodite gas field in Block 12, estimated to hold between 3.9 and 4.5 trillion cubic feet of gas, is slowly but surely moving towards its commercial development, following the recent memorandum of understanding signed by Egypt, Cyprus, and Chevron over the proposed pipeline project that will transport the gas from Cyprus to Egypt. The Kronos field in Block 6, operated by Eni, is also expected to reach a final investment decision this year, with first gas scheduled for 2028. The fact that the distance between the field and the Zohr field in Egypt, where the necessary infrastructure has already been built and is currently being used, will be largely compensated for by the intended infrastructure that will be built for the purposes of transporting Aphrodite’s gas to Egypt.

The energy situation in Cyprus is quite tough domestically. The EU carbon-allowance price is projected to reach €95 per tonne by 2026, and there is no exception for Cyprus in terms of compliance with the EU ETS, which will cost €490 million this year and will also be transferred to consumers through energy bills. The LNG terminal of Vasilikos, which has been delayed for many years, is expected to enter operation during the second half of 2026. The Great Sea Interconnector, which connects the Cypriot electricity grid with the Greek grid via Israel, is still considered a strategic investment, but is more at the level of intentions so far.

The offshore gas story is truly a major issue for the Eastern Mediterranean region’s energy future. In the meantime, however, Cypriots are forced to endure among the highest energy prices in the region. That is where the current government’s otherwise respectable record falls short.

Tax exemptions to the rescue

The story of the revival of the banking system in Cyprus is a very long and fascinating one. We are talking about a sector where non-performing loans (NPLs) comprised 49% of the total outstanding loans in 2016. It was not so much a sector with problems that required remedial action; it was a complete banking crisis that had been frozen in time. Today, the total of NPLs as a percentage of total outstanding loans is 3.2% at the end of 2025. The downward trend of NPLs, following a period of stagnation that coincided with the imposed capital-control regime of 2013, reflects in part the huge quantities of NPLs that have been sold and in part the successful completion of a large number of restructuring plans of exposures.

There was a big change in Cypriot tax law, and we believe it is the first significant change in tax laws introduced in the last two decades. The new laws took effect on 1 January 2026. Under the catch-phrase of meeting the OECD Pillar Two global minimum-tax rate, we are talking about a drastic increase in the corporate-tax rate from 12.5% to 15%. As such, it has been a very controversial move, and one can very easily understand why. But it was an inevitable decision.

Dividend tax has increased. The deemed-dividend distribution rules for profits earned after 2026 have been abolished. The special defence contribution on the actual dividends paid out from profits earned after 2026 reduces from 17% to 5%. The personal-income-tax-free threshold has increased to €22,000 from €19,500. The 8% flat tax on cryptocurrency gains and the 120% super-deduction for qualifying research and development expenditure are a couple of steps taken towards the future. A couple of things to note regarding the recent corporate-tax-rate increase and how it is being applied in the professional-services sector. Companies in the sector are already shifting toward digital assets, AI-related regulation, and wealth-mobility advisory services in response to the tax-rate increase. The pace of change can be dramatic.

Misfortune of thriving real estate

The consequences of rapid expansion are inevitable. As reported earlier, property transactions in January 2026 reached their highest level since 2008, with 1,411 contracts being deposited, an 11% increase on the corresponding period last year. Annual price rises in Paphos and Famagusta reached 25% and 23% respectively. The value of transactions in the Limassol premium market accounts for a third of the total.

As we already know, the rate at which property prices increase is around 5%–7% annually, and salaries in the country are still not high enough to absorb even remotely the current rental rates. Rent accounts for a staggering 32.3% of the average household’s monthly income in Limassol. The average monthly rental price for a one-bedroom apartment in the city centre of Limassol is around €1,300.

The government plans to complete 244 affordable residential properties allocated to low-income families in all major municipalities across the country by the end of 2026, while a private partnership is expected to deliver 1,000 affordable rental homes, with the municipality also expected to set aside €16 million for a new subsidised project in Limassol and €12 million for a similar scheme in Strovolos. This is not bad, but there are still very few measures to curb the problem of affordable housing. Remember, however, that problems related to affordability usually go unnoticed for years until they hit the headlines and cause mayhem.

Tourism income has reached €3.69 billion, up 15.2% year-on-year, with visitor numbers exceeding 4.5 million for the first time, and tourism’s share of GDP standing at around 14%. A services surplus of over €2.8 billion was recorded in the third quarter of 2025 alone, in large part due to the goods-trade deficit being a structural feature of the economy.

Tourism is trendy but is cyclical, weather-dependent, geopolitically volatile, and above all requires low-cost air travel. In the technology and shipping space, the trends are more structural. We are not diminishing the success of tourism, which remains very strong, but policymakers need to remember that it is just a base that needs to be expanded upon rather than a plateau to be sat out on.

The bottom line

The future looks promising, but it is not without challenges. The job market is extremely tight, with unemployment at just 4.5%. It means everyone who needs a job has a job, but there aren’t enough workers to boost spending power any further.

Cyprus has 1.38 million people and is one of the EU’s smaller member states, with most of them residing in cities like Nicosia and Limassol.

Though the population is growing through immigration, the median age is around 40 years, which means that people are ageing quickly and productivity is decreasing. On top of that, birth rates are really low, with around 1.5 children per woman.

Cyprus is struggling to find fresh talent. And it is in a race against time. If they cannot find enough working population to support their rapidly ageing population, their economy could suffer greatly.

Moreover, foreign firms invest heavily in Cyprus but pull back profits. The repatriation of profits contributed to around 7% of the GDP account deficit. The Fiscal Council notes that domestic reinvestment is weak and FDI seems “transient” without deeper local ties.

To combat this, Cyprus introduced new screening rules. From April 2, 2026, non-EU and Swiss investors need pre-approval for €2 million plus deals that require a 25% or more stake in strategic sectors such as AI, tech, health, and energy. If they do not comply, they risk fines up to €50,000 or a shutdown due to non-compliance. The bureaucracy adds two to three months of delay, increased legal fees, and various uncertainties for companies that want to invest in the island. Investors might want to look for other nations with better ease of doing business.

Cyprus has historically attracted FDI through lax rules, but is now forced to align these standards with the EU. However, this oversight often leads to increased friction through red tape, and geopolitical checks (Investigating Russian and other controversial links). Foreign investors were drawn to low taxes and golden passports, which ended in 2020. Massive FDI, especially from Russian companies, peaked at $33 billion in 2015 and fueled the real estate boom. Russian investments reached 80% of the total FDI of Cyprus. However, it also enabled round-tripping and sanction evasion after the Ukrainian crisis.

The 2024 data from the Central Bank of Cyprus reveals that Russian FDI stock in Cyprus hovers at €83.46 billion and has plummeted drastically from €135.7 billion in 2022. The €52 billion drop is attributed to Western sanctions and geopolitical tension.

Look, small open economies are always vulnerable to things they cannot control, such as energy shocks, regional conflict, shifts in EU policy, and global capital-flow reversals. Cyprus is not immune. But the combination of fiscal discipline, a diversified sectoral base, a sophisticated banking system, and a government that has made genuinely difficult structural decisions creates a degree of resilience that was not there a decade ago. These are not vanity metrics. They are signals that the growth dividends are being reinvested rather than extracted.

Is everything perfect? No. Energy costs remain a drag. Housing affordability is a genuine social tension. And the gas fields, however promising, have a long way to go before they change balance-of-payments arithmetic.

But Cyprus in 2026 is a fundamentally different proposition than it was in 2013. It has earned the right to be taken seriously. Definitely not as a tax-haven footnote or a bailout cautionary tale, but as a small economy that looked hard at what it wanted to be and built its way toward it with more discipline than most expected. That’s a story worth telling.

The post Cyprus: The island rebound appeared first on International Finance.

By 2030, the Gulf nation wants to reach the mark of 150 million annual visitors. Total tourism spending, on the other hand, reached the estimated SR300 billion mark (USD 81 billion), up 6% from 2024, underscoring the sector’s growing economic impact.

The development also validated the impacts created by the strategic investments and policy corrections, that the Gulf nation’s administration has implemented into the tourism sector, be it coming up with global destination projects or executing things visa reforms and expanding hospitality infrastructure, that underpin Vision 2030’s drive to diversify the economy and position the Kingdom as a leading tourism hub.

The Minister of Tourism, Ahmed Al-Khateeb, highlighted the achievement on X (formerly Twitter), thanking Saudi Arabia’s leadership for their support, which he said “delivered another year of record performance and sustained growth.”

He added, “These preliminary figures, unveiled at WEF26 (World Economic Forum 2026), underscore a clear reality: Saudi tourism is no longer an emerging story. It is a growth engine, building investor confidence, shaping global demand, and unlocking long-term opportunity at scale.”

In 2024, the Kingdom welcomed 116 million tourists, exceeding its annual visitor target for the second consecutive year, according to the Ministry of Tourism’s statistical report released in June 2025. The total comprised 29.7 million inbound visitors, marking an 8% year-on-year increase, and 86.2 million domestic trips, up 5% from 2023.

After surpassing its original 100 million visitor target six years ahead of schedule in 2023, the Kingdom revised its tourism ambitions, setting a new goal of 150 million annual tourists by 2030, including 70 million international visitors and 80 million domestic tourists.

Tourism, which currently accounts for 18% of global GDP, is emerging as another growth engine in the Kingdom’s diversification efforts, covering 5% of the nation’s GDP, Minister Al-Khateeb said.

During the ninth Future Investment Initiative conference in October 2025, Al-Khateeb said: “We aspire to double that figure within the next five years, which will represent 10% of total jobs.”

He also highlighted the rapid transformation of the Kingdom’s tourism landscape, driven by the expansion of new segments like entertainment, sports, culture, and conferences, events, and exhibitions.

The post Vision 2030: Saudi Arabia nears tourism target as visitor numbers hit 122 million appeared first on International Finance.

The Middle Eastern country’s tourism revenue rose by 12.6% year-on-year in November, reaching the USD 606.6 million mark. Most importantly, Jordan’s tourism sector has exceeded its 2024 targets for visitor numbers and revenue under the country’s “Economic Modernisation Vision.”

The development also reflects the sector’s long-term strategy, which prioritises steady expansion, with EMV targets calling for annual growth of around 10% in tourism receipts alongside sustained increases in visitor numbers.

As per the Jordan News Agency (Petra), “The Central Bank attributed the growth to a 14.7% rise in tourist arrivals. Revenue gains were led by visitors from Europe (36.1%), Asia (34.3%), the Americas (18.4%), Arab countries (3.6%), and other nationalities (33.4%). Conversely, tourism revenue from Jordanian expatriates recorded a slight decrease of 0.8%.”

The statement showed that, over the first 11 months of the year, expenditures on travel abroad increased by 5.5%, totalling USD 1.887 billion. Spending on outbound tourism, on the other hand, rose by 11.4% in November, reaching USD 146.1 million. Tourism activities across the Gulf Cooperation Council (GCC) contributed USD 247.1 billion to the region’s economy in 2024, marking a nearly 32% increase compared with 2019.

According to preliminary data released from the GCC Statistical Centre in September, intra-GCC travel witnessed a sharp rebound, as it rose 52% over the same period, with 19.3 million visitors travelling between member states. Intra-regional tourism accounted for 26.7% of total GCC tourism, highlighting growing cultural integration and regional mobility.

Saudi Arabia continued to set the pace for regional tourism expansion. In 2024, the country welcomed a record 30 million international visitors, up 8% from 2023, generating SR284 billion (USD 75.7 billion) in tourism spending, an 11% increase year on year. Total tourists’ inflow reached approximately 116 million, rising 6% over the previous year.

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The expansion supports Oman’s long-term aviation strategy, which aims to raise the sector’s GDP contribution from 159 million Omani rials (USD 413 million) in 2018 to 890 million rials by 2030, a more than sixfold increase. The strategy also targets handling 40 million passengers annually by 2030, double the levels recorded in 2019.

“The authority has focused on maximising the benefits of Oman’s position as a regional and global logistics hub, leveraging its strategic geographic location on international air routes. This is achieved through the development of Omani airports as key hubs for air connectivity and the transport of goods and passengers, facilitating domestic connections and encouraging tourism between the governorates,” the ONA reported.

The development comes amid the good news of the Sultanate’s aviation sector experiencing a remarkable revenue surge. In 2024, the Civil Aviation Authority of Oman (CAA) reported a staggering 43% increase in revenue, reaching a total of RO 105.31 million compared to 2023’s RO 73.39 million.

Oman has continued to implement a broader strategy to establish itself as a regional aviation hub, leveraging its geographic location and world-class infrastructure.

According to the analysts, the latest revenue numbers will have far-reaching implications, strengthening the Sultanate’s position in global tourism, cargo logistics, and international investment.

The number of aircraft movements in Omani airspace surged by 14% in 2024, marking over 530,300 aircraft movements compared to 465,100 in 2023. Apart from expanding its network by establishing new air routes, which have connected the Gulf nation to major cities in Asia, Europe, and Africa, there has been a parallel rise in domestic flights and routes between Oman’s major cities, through a network of smaller regional airports.

The Oman Civil Aviation Authority has also facilitated partnerships with both full-service and low-cost carriers, increasing the volume of tourists and business travellers flying into the Sultanate.

The nation is also positioning itself as a regional logistics and cargo hub, capitalising on its strategic location between Europe, Africa, and Asia. The expansion of cargo services is contributing significantly to the increase in aviation sector-related revenue flow.

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“There’s an avalanche of people, for all the reasons that you would know, relocating to Saudi Arabia,” said Sir Ben Elliot, founder of global luxury concierge firm Quintessentially, in an interview with Arab News during TOURISE, the Saudi Ministry of Tourism-powered global summit held in Riyadh from November 11-13.

“For many new arrivals, the focus is on navigating practicalities: opening bank accounts, securing cars and drivers, hiring domestic staff, and finding schools for their children. You need real proactive help to sort stuff out,” Elliot said, while adding, “Some of that stuff is a minefield.”

Over the past 18 months, demand has not only increased but also evolved, prompting Quintessentially to enhance the quality and sophistication of its local operations.

Elliot explained that the company is merging international expertise with Saudi talent to ensure high service standards from the outset.

“We brought people from our offices around the world working with young, brilliant, talented Saudis so that the service that you can expect when you arrive is really ticked off,” he said.

Elliot noted that Quintessentially’s outbound support for Saudi members is also expanding, reflecting the growing global mobility of Saudi travellers.

“What we’re seeing from the Saudis themselves is huge. We have great people on the ground servicing that,” he added.

According to Elliot, the definition of luxury is shifting from material possessions to emotion-driven, experiential value — especially among younger consumers.

“If you think about the history of luxury, it has often been about things, materials. They want to experience, they want to feel,” he noted.

Elliot further emphasised that brands in hospitality, retail, and travel need to focus on “meaningful human touch and relationships.”

Saudi Arabia’s approach to merging sustainability with luxury will emerge as a key opportunity for the sector.

“The Kingdom of Saudi Arabia is at the forefront of trying to marry sustainable development alongside a kind of luxury experience,” the Quintessentially boss remarked.

To prove his point, Elliot cited Diriyah as an example of how cultural authenticity can coexist with modern hospitality and retail offerings.

“Whenever I take friends who have never been to Saudi Arabia, to Diriyah, that to me is a physical manifestation of where culture (and) sustainability meets a pretty kind of modern experience. It feels absolutely real and authentic,” he said, while reiterating sustainability as a shared responsibility across industries and failing to prioritise environmental and social impact risks will result in the alienation of tourism industry players among younger generations.

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It recorded its first quarter of economic growth in Q3 2023, following six consecutive quarters of contraction, and maintained a positive trajectory into 2024 with a GDP growth rate of about 5% (albeit from a low base).

Crucially, the presidential and parliamentary elections in 2024 unfolded with a smooth transition of power, reinforcing confidence in the nation’s stability. The new government’s steady policies helped tame the once runaway inflation and stabilise interest and exchange rates by late 2023. At the same time, exports, tourism, and worker remittances have rebounded, boosting foreign currency inflows and supporting the recovery.

This improving macroeconomic landscape has been bolstered by important fiscal and monetary measures. The restructuring of Sri Lanka’s international sovereign bonds, alongside the International Monetary Fund’s Extended Fund Facility (EFF) programme, which released its third tranche of funds in late 2024, strengthened the economy’s fundamentals.

By the end of 2024, gross official reserves had risen to cover about 3.9 months of imports, marking an improvement from the precarious lows. Rating agencies responded by revising the country’s default rating upwards, signalling a gradual restoration of creditworthiness and renewed optimism among businesses and the public.

Continuing its comeback, the island country’s economy expanded by 4.9% in Q2 2025. According to the Department of Census and Statistics, GDP at constant 2015 prices reached Rs. 2,883 billion, compared with Rs. 2,749 billion in 2024. Growth was driven by a 5.8% rise in industry, a 3.9% expansion in services, and a 2% increase in agriculture.

However, the World Bank stated in October that, although Sri Lanka’s recent economic performance has been strong, the recovery remains incomplete.

The global financial institution further commented, “With growth still below pre-crisis levels and poverty significantly elevated, strengthening the recovery will require continued macroeconomic stability, urgent structural reforms, and more efficient, better-targeted public spending.”

The World Bank also projects Sri Lanka’s economy to grow by 4.6% in 2025, supported by a modest rebound in industry and steady growth in services, before slowing to 3.5% in 2026.

According to David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka, “To build a stronger, fairer economy that benefits all households in a fiscally constrained environment, Sri Lanka needs the private sector to invest, create jobs, and ensure that every rupee of public money is well spent.”

Despite strong recent growth, low inflation, and robust external inflows, food prices remain high, and reserve accumulation has slowed. Economic output is still below 2018 levels, and although poverty is declining, it remains twice as high as in 2019. To support long-term growth and reduce poverty amid fiscal constraints, the World Bank advocates for a broad package of reforms aimed at enabling private sector-led growth.

The South Asian nation must focus on priority areas such as easing barriers to trade and investment, improving the business environment, and modernising tax administration and regulations related to land and labour markets, and must ensure inclusive development that benefits the most vulnerable.

While Sri Lanka is indeed a comeback story in the making, one that economists are closely monitoring, it still has some way to go on the road to full recovery. In this context, Sampath Bank has played a key role in supporting the national resurgence, aligning its strategy to bolster the country’s revival and drive much-needed innovation in the banking sector.

The financial inclusion goal

From its inception in 1986, Sampath Bank has been an innovator in Sri Lanka’s banking industry, using technology and novel products to promote financial inclusion. A concept that had not even been coined at the time. As early as 1988, the bank became the first in Sri Lanka to operate a multi-point network of automated teller machines (ATMs), bringing 24/7 banking convenience to customers.

It was also the first in South Asia to introduce debit cards, launching them in 1997 when cashless payments were still a rarity in the region. Through these pioneering moves, Sampath Bank sought to democratise access to banking, making financial services more accessible and affordable for the broader population.

These early technological advancements laid the groundwork for what we recognise as financial inclusion, which refers to the principle of extending banking services to all segments of society. Staying true to this legacy, Sampath Bank has continually aligned its priorities and innovations to support the wider economy’s growth and needs.

One recent example of this commitment is the bank’s focus on reviving struggling businesses due to Sri Lanka’s downturn. Recognising that small and mid-sized enterprises were especially hard-hit by the crisis, Sampath Bank established a dedicated Business Revival Unit to provide hands-on financial advice and management tools to companies facing cash flow constraints. Rather than simply classifying such loans as non-performing, the bank proactively worked with borrowers to nurse these ventures back to health.

The impact has been tangible. Over 74 businesses were rescued and stabilised, successfully graduating from the bank’s watch-list of high-risk loans (the Stage Two and Stage Three loan portfolios, in banking parlance) back into performing status.

These enterprises have since returned to stability, benefitting from improved management practices and practical repayment plans with sufficient breathing room for growth. The success of this initiative speaks to its effectiveness in safeguarding the bank’s assets and preserving jobs and economic value in the community.

Another pillar of Sampath Bank’s recovery-era strategy has been to stimulate economic activity by expanding lending in sectors with high growth potential. In 2024, the bank’s loan book grew by 10%, a sharp turnaround from the 4.7% contraction recorded the year before. This expansion was no accident; it was driven by targeted support to key active sectors of the Sri Lankan economy.

Notably, the bank directed credit to the rejuvenated tourism industry, which is bouncing back strongly after pandemic-related setbacks. It also increased lending to the information and communication technology (ICT) sector, an area that holds promise for export earnings and high-skilled employment as Sri Lanka seeks to become a regional tech hub.

Healthcare was another focus, with financing provided for medical services and pharma companies, recognising the critical importance of health infrastructure, especially after the lessons of COVID-19. By directing credit to these vital sectors, Sampath Bank spurred its own growth and helped stimulate broader economic recovery.

In parallel, Sampath Bank leveraged its strengths in foreign currency services to support the national recovery. The bank retained its market leadership in worker remittances, a lifeline of foreign exchange for Sri Lanka’s economy. By reimagining its remittance offerings with customer-friendly benefits and extending its global reach, the bank made it easier and more rewarding for Sri Lankan’s diaspora to send money home.

This included developing more convenient digital remittance channels and forging partnerships abroad to widen its network, steps that assisted a growing migrant workforce in supporting their families back in Sri Lanka.

Additionally, Sampath Bank doubled down on its legacy of technological innovation to promote financial inclusion in the modern era. The volume and value of digital transactions handled by the bank have continued to surge as more Sri Lankans embrace online and mobile banking for their daily finances.

By investing in user-friendly digital platforms and services, the bank has been integrating Sri Lankans into the digital economy and ensuring they can access opportunities and financial services anytime, anywhere. In effect, the bank’s digital drive is the contemporary extension of its original mission to democratise banking, using the latest technology to broaden access and convenience for all.

Targeted sustainability initiatives

Even as Sampath Bank pursues financial growth, it continues to enhance the sustainability of its business model and invest in the country’s future. In fact, a cornerstone of the bank’s philosophy is that long-term financial success goes hand in hand with environmental stewardship and social responsibility. To this end, the bank has implemented several targeted sustainability initiatives that integrate with its core operations.

One key step has been institutionalising an Environmental and Social Management System (ESMS) to rigorously assess the potential environmental and social impacts of any large loan projects the bank finances. Under this system, every proposed loan above Rs 100 million is screened for environmental footprint, community impact, and compliance with social safeguards.

By embedding these checks into the credit approval process, Sampath Bank ensures that its lending supports sustainable development and does not inadvertently fund harmful practices. In essence, growth is pursued with mindfulness of ethical and environmental standards.

Complementing this, the bank actively promotes financial inclusion through many programmes and subsidiary Siyapatha Finance, which helps extend financial services to underserved segments and rural communities. For example, Siyapatha Finance and the bank can cater to micro-entrepreneurs or provide leasing facilities to individuals who might not qualify for traditional bank loans.

Additionally, Sampath Bank is preparing to adopt the new Sri Lanka Financial Reporting Standards (SLFRS) sustainability reporting framework in 2025. By aligning with these standards, which are on par with emerging global norms, the bank is committed to ensuring that its sustainability reporting is as rigorous as its financial reporting, with robust controls and transparency. This move will allow stakeholders to objectively verify the bank’s environmental, social, and governance (ESG) performance using reliable data, just as they do its financial results.

On the environmental front, Sampath Bank has taken concrete action to reduce its carbon footprint. The bank has significantly cut Scope One and Scope Two emissions (direct emissions and those from purchased energy) by investing in renewable energy installations on its properties.

It has expanded in-house solar power generation capacity, which produced 664.6 MWh of clean electricity in 2024. This is a substantial amount of energy, sufficient to power several branches and offices, and it directly offsets what the bank would otherwise draw from fossil-fuel-generated grid power.

By greening its energy consumption in this way, Sampath Bank is lowering operating costs over the long run and setting an example in Sri Lanka’s corporate sector for transitioning to renewable energy.

Moreover, the bank has been greening its loan book by financing sustainable projects. In 2024 alone, it lent Rs 1,440 million (about $4.9 million) to renewable energy ventures, supporting projects with a total installed capacity of 10 MW.

This means the bank is helping fund new solar, wind, or small hydropower plants that add 10 megawatts of clean energy to the national grid, contributing to the reduction of Scope Three emissions (which are indirect emissions in its value chain) by enabling cleaner power generation for the country. Alongside energy initiatives, Sampath Bank has introduced measures to minimise and manage waste.

This includes reducing paper use through digital banking solutions, encouraging recycling in its offices, and ensuring proper e-waste disposal. By transforming internal workflows to be more sustainable, for instance, by moving customers to e-statements and digital forms instead of paper, the bank reduces waste and creates awareness among employees and customers about eco-friendly practices. These internal changes are reinforced by awareness campaigns and training, ensuring that everyone in the organisation understands the importance of collective action on sustainability.

Sampath Bank’s sustainability efforts are strategic in nature, designed to nurture environmental and social ecosystems that ultimately support each other and the bank’s long-term viability. A shining example is the bank’s flagship corporate social responsibility (CSR) programme: Wewata Jeewayak (a Sinhala phrase meaning “Life to Tanks”). This initiative, now in its 24th year, is dedicated to rehabilitating and rebuilding Sri Lanka’s ancient irrigation reservoirs (locally known as “tanks”), which are crucial for agriculture and rural livelihoods.

Over the decades, Wewata Jeewayak has restored 30 reservoirs across the country. These irrigation tanks are vital for the country’s food production, as they store rainwater and supply it to paddy fields and villages, particularly in Sri Lanka’s dry zones.

By reviving these water bodies, the bank’s programme has supported the livelihoods of more than 3,700 farming families, enabling them to cultivate their lands and sustain their communities. In 2024, Wewata Jeewayak achieved a record milestone by completing the restoration of nine tanks in a single year, the highest number of reservoirs rejuvenated in any given year since the project’s inception.

The impact of this work is profound. Collectively, these reservoirs irrigate roughly 3,400 acres of paddy fields, which means farmers in those areas can now grow two cultivation seasons instead of one each year, thanks to a reliable water supply. The increased agricultural yield boosts farmers’ incomes and contributes to the nation’s food security.

Additionally, restoring the tanks has positive ripple effects on local ecosystems, as the revived reservoirs and their surrounding wetlands help rejuvenate flora and fauna, restoring biodiversity that had dwindled when the tanks were silted up or broken.

What makes Wewata Jeewayak particularly noteworthy is its holistic approach. The programme does not stop at brick-and-mortar renovation of irrigation systems; it actively involves community partners and experts to broaden its scope.

Through these partnerships, the initiative has been extended to promote financial inclusion, for example, by educating farmers about savings and providing them access to microloans, encouraging entrepreneurship development in farming communities, such as training on food processing or marketing techniques, and disseminating good agricultural practices, including efficient water usage and sustainable farming methods.

Beyond freshwater conservation, Sampath Bank has also launched initiatives to preserve Sri Lanka’s marine and forest environments, recognising that sustainability has many fronts. One such initiative is ‘A Breath to the Ocean,’ which focuses on protecting and rejuvenating marine ecosystems. Through this programme, the bank supports activities such as mangrove restoration along coastal lagoons, coral reef replanting in damaged reef areas, and turtle conservation efforts on nesting beaches.

Mangroves are a key focus because they act as natural buffers against coastline erosion and are excellent carbon sinks, while also serving as nurseries for fish and other marine life. Coral replanting helps revive coral reefs that have been bleached or harmed, thereby preserving marine biodiversity and supporting fisheries and tourism.

Turtle conservation activities, such as protecting turtle nests or conducting rescue efforts, ensure that endangered sea turtles, which are part of Sri Lanka’s natural heritage, have a better chance of survival. Meanwhile, the bank’s ‘Gasai Mamai Pubudu Pothai’ programme, which translates to “The Tree, Me and My Savings Book,” takes a creative approach to instilling environmental consciousness in the next generation. This initiative typically engages school children, encouraging them to plant and nurture trees while cultivating the habit of saving money.

By linking tree planting with the idea of a savings book, the programme teaches youngsters two valuable lessons: the importance of caring for the environment and the benefits of financial responsibility. Participants often receive a tree sapling to plant and a children’s savings account or a savings booklet, symbolically tying together the growth of their tree with the growth of their savings.

It is an innovative way to educate youth about sustainability, both ecological and financial, in a manner that is hands-on and memorable. In addition to these, Sampath Bank has been involved in forest restoration projects. Notably, it has undertaken reforestation efforts in the Kanneliya Forest Reserve, one of Sri Lanka’s biodiversity-rich rainforests, and in areas around Udawalawe, as well as a Mangrove Restoration Project in the Anawilundawa Wetland, which is a protected Ramsar wetland of international importance.

These CSR projects typically involve planting indigenous trees to expand forest cover, removing invasive species, and working with local environmental groups to ensure the long-term survival of the saplings. The restoration of Anawilundawa’s mangroves, in particular, helps protect a critical wetland habitat that is home to numerous bird species and aquatic life, underscoring the bank’s commitment to safeguarding diverse ecosystems.

Investing in the future

Sustainable banking is not only about external projects or green initiatives; it is also about investing in the people who drive the bank’s success. Sampath Bank understands that its employees are its greatest asset, especially in a service-driven industry like finance. As such, the bank continues to invest heavily in its people, supporting their career progression through focused training and ensuring their health and well-being are looked after.

In 2024, a renewed emphasis was placed on staff development and welfare, recognising that a motivated, skilled workforce will be the engine of the bank’s growth. Over 16 different programmes were implemented during the year to promote employees’ health and wellness, ranging from physical health initiatives such as medical check-ups, fitness and sports activities, to mental health support such as stress management workshops and counselling services.

These programmes reached more than 23% of the bank’s employees in this initial roll-out, and the bank aims to expand its coverage in the coming years so that an even greater share of staff can benefit.

Looking ahead, Sri Lanka entered 2025 on an optimistic note, and Sampath Bank is poised to be both a beneficiary and an enabler of the next chapter of growth. A convergence of positive factors has created a favourable outlook, as the country enjoys ongoing political stability, a recently improved sovereign credit rating, and continued growth in key inflows such as trade exports, tourism, and remittances.

Forecasts indicate that business confidence is rising, positioning Sri Lanka to achieve around 5% GDP growth by 2025. The banking sector is expected to play a catalytic role in this scenario, since banks will provide the financing for new investments and consumption that drive GDP, while also reaping the rewards of increased economic activity in the form of higher credit demand, transaction volumes, and financial inflows.

Sampath Bank’s current multi-faceted growth strategy will guide its direction within this landscape. The initiatives described above, ranging from the five-pillar focus to the digital transformation and sustainability agenda, will guide the bank’s quest to become the best bank in the country. Its approach is confident and purposeful.

Ajantha de Vas Gunasekara, Sampath Bank’s Executive Director and CFO, said, “We remain confident about realising our aspirations as we build on solid foundations with a motivated team.”

Indeed, with a revitalised economy, a clear strategic roadmap, and an empowered workforce, Sampath Bank’s blueprint for sustainable banking appears well-positioned to deliver enduring value to its shareholders, customers, and Sri Lanka.

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While sharing the update with the Saudi-based business media outlet Al-Eqtisadiah, on the sidelines of her participation in the events of the TOURISE 2025 forum in Riyadh, Santanche said, “Saudi Arabia has made significant progress in diversifying its tourism offerings and improving its infrastructure, making it an attractive destination for international visitors.”

While emphasising that tourism exchange programmes between the two countries could enhance cultural ties and encourage visitor flows, the Italian Minister mentioned that the European country is working with the national carrier ITA Airways to explore opportunities to enhance direct air connectivity with Saudi Arabia to accommodate tourist flows in both directions.

Relations between Saudi Arabia and Italy are witnessing steady growth, with the trade volume between the two countries reaching 966 million euro (USD 1.11 billion) in the first half of 2025. Tourist flows are increasing as well, as more than 322,000 Saudi nationals visited Italy in 2024, a 65% increase year-on-year, spending more than half a billion euros.

“Participation in the forum provided an opportunity for leading Italian companies to showcase what they have, creating favourable conditions for mutual investment and further enhancing relations between the two countries. We are actively promoting cooperation between Italy and Saudi Arabia. The participation of Italian companies in the ‘TOURISE’ initiative is an important step in this direction,” Santanche noted.

“Many Italian tourism companies are currently operating in Saudi Arabia and are ready to cooperate with their Saudi counterparts to develop new opportunities,” Santanche continued, while confirming that facilitating the entry of Gulf Cooperation Council (GCC) citizens, led by Saudis, into European Union (EU) countries is an important factor for increasing current tourism flows.

In April 2024, the European Commission adopted a historic decision to grant GCC citizens five-year multiple-entry Schengen visas. Saudis currently account for 60% of the Schengen visas granted to the Gulf countries combined, amounting to 470,888 visas, as previously reported by the EU press office in the Belgian capital Brussels to Al-Eqtisadiah.

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Organised by the UAE Ministry of Economy and Tourism in collaboration with The Bench as part of Future Hospitality Summit (FHS) World 2025, the event brought together senior government officials, investors, and industry leaders to chart investment priorities and explore opportunities across tourism, infrastructure, aviation, and digital innovation.

On the sidelines of the event, a ministerial roundtable led by Abdulla bin Touq Al Marri, UAE Minister of Economy and Tourism, witnessed the presence of ministers from over 20 African nations. The meeting concluded with a joint ministerial statement outlining plans to boost collaboration in various tourism sectors.

“Today, the UAE and Africa stand at a pivotal moment in developing a resilient and sustainable tourism sector. This milestone is marked by the launch of a new investment mapping featuring diverse tourism projects in aviation, logistics, infrastructure, and the digital sector, with an estimated total value of approximately USD 6 billion and the potential to generate 70,000 job opportunities across Africa,” said Al Marri.

The official added, “Africa is home to a wealth of rich and diverse tourism assets – from coastal resorts and pristine beaches to cultural, heritage, and historical landmarks. These unique features present vast opportunities for the UAE business community and serve as a vital gateway for investment and expansion across various tourism activities. We are committed to fully leveraging this platform to transform ideas into tangible and sustainable tourism projects and partnerships that will help shape the future of economic development across the African continent.”

The ministerial statement also talked about shared goals such as improving tourism infrastructure, expanding air connectivity, and advancing green, inclusive growth through partnerships and SME support.

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