IMF Warns Prolonged Middle East Conflict and Energy Disruptions Threaten Regional Stability
The IMF projects a 1.3% economic contraction for the Middle East in 2026, citing war-related trade disruptions and energy risks as primary economic threats.
POLICY WIRE — Washington, USA — The International Monetary Fund issued a stark warning on Thursday, identifying a protracted war in the Middle East and potential new interruptions to energy production, shipping lanes, and essential infrastructure as the primary dangers facing economies throughout the Middle East and Central Asia.
Jihad Azour, the director of the IMF’s Middle East and Central Asia department, noted that the economic impact of the conflict is highly uneven. He explained that the severity of the shock depends largely on a nation’s specific trade ties to Iran and its individual economic specialization.
The conflict, which erupted on February 28, 2026, has severely impacted one of the globe’s most vital economic corridors. While the ceasefire agreement reached on April 7 represents a positive move toward de-escalation, the IMF emphasized that significant uncertainty persists.
According to the IMF’s Middle East and Central Asia Regional Economic Outlook, presented during the 2026 Spring Meetings, the region is grappling with diminished business confidence and disrupted trade. Consequently, the IMF forecasts that the Middle East, North Africa, and Pakistan region will experience a 1.3% economic contraction in 2026.
This projected downturn follows a year of 3.3% growth in 2025. Looking ahead, the fund anticipates an uneven recovery, with the region expected to rebound by 6.6% in 2027.
Reporting by Policy-Wire (PW)
