The International Monetary Fund (IMF) has forecast that the economies of the Middle East, North Africa, Afghanistan, and Pakistan will shrink by approximately 1.3% in 2026 amid the economic fallout from the war involving the United States, Israel, and Iran.
According to the IMF’s latest report, released in Dubai on Thursday October 22 disruptions to energy production, shipping routes, trade, and tourism are among the main factors contributing to the region’s economic slowdown.
The IMF has revised its 2026 economic growth forecast downward by approximately three percentage points compared with its April projection.
The institution warned that continued conflict and further disruptions to energy supplies and trade routes could worsen the region’s economic outlook.
According to the report oil-exporting countries affected by disruptions to energy production and transportation face greater economic pressures.
Meanwhile oil-importing economies have demonstrated greater resilience supported by domestic demand, remittances, and tourism revenues.
The IMF also projected that the region’s economy could grow by 6.6% in 2027 if hostilities ease in early 2027 and regional trade gradually returns to normal.
However the institution emphasized that uncertainty surrounding the economic outlook remains exceptionally high.
