Key facts
- IMF forecasts 1.3% economic contraction in Middle East, North Africa, Pakistan in 2026.
- IMF projects 6.6% growth for the region in 2027.
- War's impact on energy production, shipping, tourism, and trade cited as key factors.
- Oil importers showed more resilience due to domestic demand and policy responses.
The International Monetary Fund projected a 1.3% contraction in economic output for the Middle East, North Africa, and Pakistan in 2026, attributing the decline to the US-Israeli-led war against Iran. The conflict has impacted energy production, shipping, tourism, and trade, with oil-exporting economies being more severely affected. The IMF anticipates a rebound to 6.6% growth in 2027, though regional output is expected to remain below pre-war projections. The outlook is subject to high uncertainty, with risks including further disruptions to energy production and trade routes, which could drive up energy prices and tighten external financial conditions. Oil importers have shown more resilience due to strong domestic demand, remittances, tourism, and supportive policy responses.