The International Monetary Fund (IMF) stated that a prolonged war in the Middle East and disruptions to energy production and shipping pose significant risks to the economies of the Middle East and Central Asia. Jihad Azour, the IMF’s director for the region, highlighted that the war is causing uneven economic damage, especially to directly affected countries. He emphasized the importance of quickly normalizing energy production and trade for future economic stability.
Azour noted that pre-war surpluses and alternative routes had temporarily mitigated the energy shocks but warned that these buffers are limited and any renewed disruption could lead to larger price changes. The IMF predicts a contraction of 1.3% in the Middle East, North Africa, and Pakistan in 2026, followed by growth of 3.3% in 2025, and a stronger rebound of 6.6% in 2027. This forecast relies on a return to normal trade by early 2027 and sustained higher oil prices.
He pointed out that oil-exporting countries affected by the war would experience a downturn in 2026 but may rebound in 2027, while oil-importing countries in the region show resilience. Azour advised policymakers to focus on price stability, rebuilding financial buffers, and enhancing resilience against future economic shocks.
With information from Reuters
