IMF forecasts 1.3% economic contraction in Middle East, North Africa, Pakistan

The economy of the Middle East, North Africa, and Pakistan will shrink by 1.3% in 2026 due to the consequences of the conflict of the US and Israel against Iran, Report informs citing a statement by the International Monetary Fund (IMF).

According to the fund's assessment, the conflict is impacting energy production, shipping, tourism, trade, and economic confidence. In 2027, the IMF expects growth to rebound to 6.6%.

The baseline forecast assumes an easing of the conflict in early 2027 and a gradual normalization of trade throughout the year. At the same time, the fund notes exceptionally high uncertainty.

Major risks are associated with further disruptions in energy production and trade routes, which could lead to an increase in energy prices, according to the IMF.