{"id":3135,"date":"2026-10-22T20:03:52","date_gmt":"2026-10-22T15:03:52","guid":{"rendered":"https:\/\/ipp-news.com\/?p=3135"},"modified":"2026-10-22T20:03:52","modified_gmt":"2026-10-22T15:03:52","slug":"middle-east-north-africa-and-pakistan-gdp-to-contract-1-3-in-2026-imf-says","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=3135","title":{"rendered":"Middle East, North Africa and Pakistan GDP to contract 1.3% in 2026, IMF says"},"content":{"rendered":"
\n

The IMF on Thursday forecast a sharp drop in economic output in the \u200cMiddle East, North Africa and Pakistan this year due to the Iran war, followed by 6.6% growth in 2027, though it warned that further energy production disruptions could worsen the outlook.<\/strong><\/p>\n

The International Monetary Fund said the region\u2019s output was expected to contract by 1.3% because of the war\u2019s impact on energy production, shipping, tourism, trade, and confidence.<\/p>\n

Economic growth would increase sharply in 2027, but output in those economies would generally stay below pre-war projections.<\/p>\n

The IMF said in its regional outlook released on Thursday in Dubai that the impact of the US-Israeli-led war against Iran had been substantial but uneven: oil-exporting economies directly affected by disruptions to energy production and shipping were hit harder, while oil importers proved more resilient.<\/p>\n

\u201cThis sharp downgrade is concentrated among the economies most directly affected by the conflict,\u201d Jihad Azour, the IMF\u2019s director for the Middle East and Central Asia, said at a press conference.<\/p>\n

\u201cSeveral Gulf oil exporters are projected to experience recession this year,\u201d he added.<\/p>\n

<\/a>OUTLOOK CLOUDED BY \u2018HIGH UNCERTAINTY\u2019<\/h3>\n

According to the IMF regional outlook, Gulf Cooperation Council (GCC) economies are expected to \u200bcontract in 2026, with Oman the exception. Bahrain, Kuwait, Qatar, along with non-GCC member Iraq, are forecast to post double-digit declines \u200bin gross domestic product.<\/p>\n

\u201cAlthough relatively less affected by the disruptions in energy trade, Saudi Arabia and the United Arab Emirates are now also projected \u200cto experience \u2060a recession in 2026,\u201d the IMF said in the report.<\/p>\n

It said its baseline assumed that the conflict would abate in early 2027 and that trade would gradually normalise during the year, but it said the outlook remained clouded by \u201cexceptionally high uncertainty.\u201d<\/p>\n

\u201cA more prolonged conflict remains the principal risk to the outlook,\u201d Azour said.<\/p>\n

The US State Department on Wednesday ordered some diplomats and family members to leave its missions \u200bin Saudi Arabia and plans \u200bto withdraw family members from \u2060a number of other US missions in the region, officials told Reuters.<\/em>\u00a0The move follows escalating missile strikes by Yemen\u2019s Iran-aligned Houthis on the kingdom.<\/p>\n

External financial conditions could also tighten if investors reassess \u200bAI-driven productivity gains and interest rates rise further amid heightened concerns about inflation and fiscal \u200bpositions, the IMF \u2060said in its outlook.<\/p>\n

Domestic demand in oil-importing economies is supported by remittances and tourism flows, favourable financial conditions, and prompt policy responses that safeguard consumers from higher commodity prices, the IMF said.<\/p>\n

Growth in the Caucasus and Central Asia was moderating toward a more sustainable pace, the \u2060IMF said, \u200bforecasting a 5.2% rise in economic output in 2026 and 5% in 2027.<\/p>\n

The \u200bIMF underscored the mantra it delivered during last week\u2019s annual meetings, urging policymakers to prioritise maintaining price stability, while preserving fiscal sustainability, maintaining central bank independence and \u200benacting structural reforms to boost productivity and create jobs.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The IMF on Thursday forecast a sharp drop in economic output in the \u200cMiddle East, North Africa and Pakistan this year due to the Iran war, followed by 6.6% growth in 2027, though it warned that further energy production disruptions could worsen the outlook. The International Monetary Fund said the region\u2019s output was expected to contract by 1.3% because of the war\u2019s impact on energy production, shipping, tourism, trade, and confidence. Economic growth would increase sharply in 2027, but output in those economies would generally stay below pre-war projections. The…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-3135","post","type-post","status-publish","format-standard","hentry","category-english"],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3135","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3135"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3135\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}