Key facts
- IMF forecasts 1.3% contraction for Middle East, North Africa and Pakistan region in 2026.
- IMF expects 6.6% growth rebound in 2027 for the region.
- Oil-exporting countries to see contraction in 2026 and rebound in 2027.
- Caucasus and Central Asia region growth projected to slow to 5.2% in 2026 and 5% in 2027.
Prolonged war in the Middle East and further disruptions to energy production, shipping routes, or critical infrastructure pose the biggest risk to economies in the region, the International Monetary Fund said on Thursday. Jihad Azour, the IMF's director for the Middle East and Central Asia, told reporters that the war was imposing a highly uneven economic shock, with directly affected states under severe pressure. Buffers such as pre-war surpluses, alternative routes, demand adjustments, and inventory drawdowns had helped contain the impact of the energy shock, but these are finite. The IMF forecasts a deep contraction of 1.3% for the Middle East, North Africa and Pakistan region in 2026, followed by a strong rebound to 6.6% in 2027. Oil-exporting countries directly affected by the war would see a significant contraction in 2026 and a sharp rebound in 2027, while oil-importing countries were expected to remain resilient. The Caucasus and Central Asia region had weathered the shock relatively well, with inflation expected to decline.