Business · Economy · 6 hrs ago
IMF warns prolonged Middle East war could deepen economic risks
The IMF says a prolonged Middle East war is the region’s biggest economic risk.
Its director for the Middle East and Central Asia, Jihad Azour, spoke at IMF and World Bank meetings in Bangkok.
The conflict has affected economies unevenly, and oil prices have offered some support to oil-producing countries.
Reserves, alternative routes and reduced demand have so far softened the energy shock.
But inventories are falling and spare production capacity is tighter, leaving less room to absorb fresh disruptions to energy, shipping or critical infrastructure.
The IMF forecasts a 1.3% contraction in the Middle East, North Africa and Pakistan in 2026, followed by 6.6% growth in 2027.
Oil-importing economies have shown resilience, while output in war-affected oil exporters is expected to rebound as energy production recovers but remain below earlier projections.
Policymakers are being urged to control inflation and rebuild financial buffers; the outlook depends on how quickly energy production and trade return to normal.
Middle East economies absorbed the economic shock of the war better than initially expected, the International Monetary Fund said.
IMF regional director Jihad Azour said the impact varied widely, with countries directly affected by the war under severe pressure.
Pre-war surpluses, alternative transport routes, changes in demand and large inventory drawdowns helped contain the energy shock.
The IMF forecasts a 1.3% contraction in the Middle East, North Africa and Pakistan in 2026, followed by 6.6% growth in 2027.
Azour warned that prolonged war or renewed disruption to energy production, shipping routes or critical infrastructure could worsen the outlook.
- Who
- The International Monetary Fund and its regional director, Jihad Azour.
- What
- The IMF said regional economies weathered the war’s economic shock better than expected, but warned of significant risks.
- When
- Azour spoke on October 15, 2026; the IMF forecasts a 1.3% contraction in 2026 and 6.6% growth in 2027.
- Where
- At the IMF and World Bank annual meetings in Bangkok.
- Why
- Pre-war surpluses, alternative transport routes, demand adjustments and inventory drawdowns helped cushion the shock.
This story does not have two clearly opposing sides.
Pre-war surpluses and other buffers helped cushion the region against the energy shock.
Jihad Azour discussed the regional economic outlook at the IMF and World Bank annual meetings in Bangkok.
The IMF forecasts a 1.3% contraction in the Middle East, North Africa and Pakistan.
The IMF expects growth in the region to rebound to 6.6%.
- IMF regional director
- Jihad Azour
- Regional contraction forecast
- 1.3% in 2026
- Regional growth forecast
- 6.6% in 2027
- Meeting location
- Bangkok
- Key risks
- Prolonged war and renewed disruption to energy production, shipping routes or critical infrastructure
3 sources
What people are saying
The outlook depends critically on how quickly energy production and trade normalise, and on countries’ ability to preserve macroeconomic stability,
These buffers bought time, but they are finite. Inventories are lower, spare capacity is tighter, and renewed disruption could generate much larger price adjustments,
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