The International Monetary Fund (IMF) on Thursday forecast a sharp drop in economic output in the Middle East, North Africa and Pakistan this year due to the United States, Israeli-led war against Iran, followed by a rebound to 6.6% growth in 2027, while warning that further energy production disruptions could worsen the outlook.
IMF said the region’s output was expected to contract by 1.3% as a result of the war’s impact on energy production, shipping, tourism, trade and confidence.
Economic output would increase sharply in 2027, but output in those economies would generally stay below pre-war projections.
The war’s impact had been substantial, but uneven, with oil-exporting economies directly affected by disruptions to energy production and shipping hit harder, and oil importers proving to be more resilient, the IMF said in its regional outlook released Thursday in Dubai.
The IMF 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 “exceptionally high uncertainty.”
–Reuters–
