IMF Forecasts 1.3% MENAP Contraction in 2026
The International Monetary Fund expects the MENAP region to experience an economic contraction of 1.3% in 2026 due to the impact of the war between the United States and Israel against Iran, particularly on the energy production, tourism, and trade sectors. However, by early 2027, output is projected to grow by 6.6% as conditions improve, though this growth will remain below pre-war expectations if disruptions in energy and trade persist. The forecasts highlight that oil-exporting countries are more affected, while importing countries have shown greater resilience thanks to domestic demand and financial flows. The Fund also noted that risks remain high due to the uncertain situation, emphasizing the need for policies that ensure price stability, fiscal sustainability, and enhanced productivity through structural reforms.
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