Middle East, North Africa and Pakistan GDP to contract 1.3% in 2026, IMF says
SPY•The IMF forecast that output in the Middle East, North Africa and Pakistan will contract 1.3% in 2026 because of the Iran war, followed by 6.6% growth in 2027. It warned that further energy disruptions could worsen the outlook.
1. Regional output forecast to fall
The IMF forecast a 1.3% contraction in output across the Middle East, North Africa and Pakistan in 2026, citing the war’s impact on energy production, shipping, tourism, trade and confidence. It expects 6.6% growth in 2027, though output would generally remain below pre-war projections.
2. Gulf economies face recession
Gulf Cooperation Council economies are expected to contract in 2026, with Oman the exception. Bahrain, Kuwait, Qatar and Iraq are forecast to post double-digit GDP declines, while Saudi Arabia and the United Arab Emirates are also projected to experience recessions. The IMF said its baseline assumes the conflict abates in early 2027 and trade gradually normalizes, but warned that a longer conflict is the principal risk.
