AI, climate resilience could boost Mideast GDP by $232b: PwC
The report identifies the UAE as a key driver of this transformative growth, thanks to its early investments in AI infrastructure, strong climate commitments, and leadership in renewable energy.
Titled Value in motion: The Middle East's time to lead is now, the PwC report outlines three future economic scenarios for the region, showing how decisive leadership in AI and sustainability can unlock a new era of tech-enabled prosperity. Under the most ambitious outlook, regional GDP could reach $4.68 trillion by 2035, compared to $3.57 trillion today — an increase of over $1.1 trillion.
However, this optimistic trajectory hinges on two critical levers: widespread, responsible AI adoption and a proactive approach to climate adaptation. Without intervention, the region could suffer a GDP hit of up to 13.9 per cent due to escalating climate risks such as extreme heat, water scarcity, and flooding. On the flip side, PwC's modelling shows that AI alone could contribute 8.3 per cent to GDP growth through productivity gains across sectors.
The UAE, already recognised for its forward-looking digital agenda, is positioning itself as a pioneer in this dual transformation. Home to the world's first Ministry of Artificial Intelligence and one of the lowest-cost renewable energy ecosystems globally, the UAE is uniquely placed to lead the convergence of digital and sustainable development.
Stephen Anderson, chief strategy and technology officer at PwC Middle East, emphasised that the coming decade will test the region's readiness to embrace profound structural change. 'As the dynamics of the 'three tomorrows' unfold — technology disruption, climate urgency, and cross-sector transformation — they will reshape the Middle East's economy,' he said. 'To stay ahead, businesses and governments must act with pace, purpose, and partnership.'
The research introduces a new framework centered on what PwC calls 'domains of growth' — interconnected ecosystems that move beyond traditional sectors and reflect how societies will meet core human needs in the future. These include how we move, build, fuel, care, compute, and connect. In this context, the UAE's multi-sectoral initiatives — from AI-powered healthcare and autonomous transport to clean hydrogen and 5G infrastructure — offer a real-time blueprint for regional reinvention.
Dr Yahya Anouti, partner at Strategy& and PwC Middle East's sustainability platform leader, stressed the importance of balancing AI scalability with energy availability. 'A critical factor will be how effectively the region aligns the cost and scalability of AI with the availability of clean energy to power it. This balance is essential as AI demand accelerates at an unprecedented pace,' he noted.
The report argues that the Middle East — especially countries like the UAE and Saudi Arabia — can not only adapt to emerging global shifts but lead them, if they align institutional innovation, private-sector reform, and talent development. Governments are urged to reconfigure ministries to meet evolving societal needs — such as establishing departments focused on mobility, care, or digital governance — and to create public funds aimed at fast-tracking AI adoption.
Analysts noted that businesses in the region are encouraged to localise supply chains, redesign operating models for a low-carbon digital economy, and form cross-sector partnerships. Academic institutions are also called on to develop future-ready talent by embedding AI, climate studies, and entrepreneurship into their curricula while fostering applied research.
The UAE's recent moves reflect this holistic approach. In May, the government unveiled plans to deploy AI across education, logistics, and public safety. Simultaneously, Abu Dhabi is ramping up investment in clean hydrogen, while Dubai has launched initiatives to equip one million people with AI skills by 2030.
Global tech firms are also taking note. Microsoft, Google, and Amazon Web Services have all expanded their cloud infrastructure in the UAE, citing the country's stable regulatory environment and clean energy availability as decisive factors. With AI data centers requiring immense energy input, the UAE's solar and nuclear assets offer a sustainable edge.
The report underscores that while the opportunity is vast, the clock is ticking. The Middle East's path to $4.68 trillion in GDP by 2035 is not guaranteed — but it is within reach, if nations seize the moment.
'The value is already in motion,' the PwC report concludes. 'Now is the time to act.'
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