The IMF said prolonged war and renewed disruptions to energy production, shipping routes or critical infrastructure pose the biggest risk to the Middle East and Central Asia. It forecasts a 1.3% contraction in the Middle East, North Africa and Pakistan in 2026, followed by 6.6% growth in 2027.
The IMF forecasts a 1.3% contraction in the Middle East, North Africa and Pakistan region in 2026, after 3.3% growth in 2025. Growth is expected to rebound to 6.6% in 2027, unevenly across the region.
The forecast assumes normal trade and shipping resume in the first quarter of 2027, exports gradually normalize by mid-year and oil prices stay higher. IMF regional director Jihad Azour said the outlook depends on how quickly energy production and trade normalize, and warned that inventories are lower and spare capacity tighter, leaving the region vulnerable to renewed disruption.
Oil-exporting countries directly affected by the war are expected to contract significantly in 2026 and rebound sharply in 2027, though output would remain below pre-war medium-term projections. Growth in the Caucasus and Central Asia is forecast to slow from 6.2% in 2025 to 5.2% in 2026 and 5% in 2027.
