IMF expects a 1.3% contraction in Middle East economic output
Agencies2 min read
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The International Monetary Fund (IMF) predicted on Thursday a sharp decline in economic output in the Middle East, North Africa, and Pakistan this year due to the war initiated by the United States and Israel against Iran, to be followed by a recovery to record 6.6% growth in 2027, while warning that any further disruptions in energy production could lead to a downgrade in the outlook.
The IMF announced that the region's output is expected to contract by 1.3% as a result of the war's impact on energy production, shipping, tourism, trade, and confidence. Economic output is expected to rise significantly in 2027, yet output in those economies will generally remain below pre-war projections.
In its report released today, Thursday, in Dubai, the IMF stated that the impact of the war has been significant but uneven, as the economies of oil-exporting countries were more directly affected by energy production and shipping disruptions, while oil importers showed greater economic resilience.
The Fund noted that the projections are based on the assumption that the conflict will subside in early 2027 and that trade will gradually return to normal during the year, but it stated that the outlook remains shrouded in uncertainty due to "exceptionally high ambiguity."
On the other hand, the Fund said that growth in the Caucasus and Central Asia is heading toward a more sustainable pace, projecting a 5.2% rise in economic output in 2026 and 5% in 2027.
