IMF sees 1.3% contraction in Middle East, North Africa and Pakistan in 2026

The International Monetary Fund (IMF) has projected a 1.3% economic contraction for the Middle East, North Africa, and Pakistan region in 2026. This decline is attributed to the ongoing conflict involving the U.S., Israel, and Iran, which has significantly impacted regional economic output. The IMF further cautioned that potential disruptions to energy production could exacerbate these negative economic conditions.

Despite the projected downturn, the IMF anticipates a subsequent economic recovery for the region, forecasting a rebound to 6.6% growth in 2027. However, the organization noted that overall output is expected to remain below pre-war projections, indicating long-term economic challenges resulting from the current geopolitical instability.