IMF Warns Middle East, North Africa and Pakistan Region Could Contract 1.3% in 2026
What Happened
The International Monetary Fund (IMF) forecasts that economic output in the Middle East, North Africa and Pakistan (MENAP) region will contract by 1.3% in 2026, reversing growth of 3.3% in 2025. The IMF attributes the downturn to disruptions to energy production, shipping, trade, tourism and business confidence linked to the ongoing regional conflict. The Fund expects a rebound to 6.6% growth in 2027, assuming trade and shipping routes gradually normalize.
Key Takeaways
The IMF says the outlook remains highly uncertain and depends heavily on the restoration of energy production and trade flows. Further disruptions to oil supplies, critical infrastructure or shipping routes could worsen the economic outlook and increase inflationary pressures.