IMF forecasts 1.3% contraction across Middle East, North Africa, Pakistan

The International Monetary Fund has warned of a 1.3% economic contraction across the Middle East, North Africa and Pakistan in 2026, citing uneven global fallout from ongoing regional conflicts.

Oil-exporting countries in the region face particular pressure from disruptions to production and shipping activities, the IMF indicated. These nations have borne a disproportionate share of economic strain stemming from geopolitical tensions and their impact on energy markets.

By contrast, oil-importing nations in the region have demonstrated greater economic resilience amid the turbulent global environment. Their reduced dependency on petroleum exports has insulated them somewhat from the worst effects of supply-chain disruptions and shipping delays affecting hydrocarbon producers.

The fund's forecast underscores how geopolitical shocks continue to produce markedly different economic outcomes across the developing world, with commodity-dependent economies proving more vulnerable to external shocks than diversified alternatives.