IMF Projects 1.3% Economic Contraction for MENAP Region in 2026 Amid Regional Conflict
The IMF forecasts a 1.3% economic contraction for the Middle East, North Africa, and Pakistan in 2026, citing regional conflict and energy disruptions.
POLICY WIRE — Dubai, UAE — The International Monetary Fund (IMF) issued a stark economic forecast on Thursday, projecting a 1.3% contraction in economic output across the Middle East, North Africa, and Pakistan (MENAP) for 2026.
This downturn represents a significant reversal from the 3.3% growth recorded in 2025. The IMF attributes the decline directly to the ongoing conflict involving the United States, Israel, and Iran, which began on February 28, 2026.
While the regional outlook remains grim for the current year, the global lender anticipates a rebound to 6.6% growth in 2027. However, the IMF cautioned that this recovery is contingent upon the normalization of energy production and the reopening of critical shipping routes.
The report, released during the IMF-World Bank annual meetings in Bangkok, highlights that prolonged hostilities and disruptions to oil production and transit through the Strait of Hormuz are primary drivers of the current instability. Even with a projected 2027 recovery, the IMF noted that most regional economies will likely remain below their pre-war growth projections.
Reporting by Policy-Wire (PW)
