IMF forecasts Middle East economic decline
The International Monetary Fund (IMF) expects the economy of the Middle East, North Africa, and Pakistan to decline by 1.3% in 2026 due to the economic repercussions of the war in the region. The conflict has caused an uneven economic shock, placing pressure on affected countries, especially due to disruptions in oil production and concerns over energy supplies, despite some hedging efforts through alternative methods. The IMF also warned that available oil reserves remain limited, with a significant contraction expected for oil-exporting countries in 2026, followed by a projected rebound in 2027, although production levels will still be below pre-war forecasts. The fund called for rebuilding financial reserves and focusing policies on price stability, emphasizing the need for prudent monetary and fiscal measures to manage the shock and mitigate future risks.
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