MENAP GDP to contract 1.3pc in 2026: IMF

The IMF expects economic output across the Middle East, North Africa and Pakistan (MENAP) to fall 1.3 percent in 2026, citing the Iran war’s effects on energy production, shipping, tourism, trade and confidence. In a regional outlook released in Dubai on Thursday, the Fund projected a 6.6 percent rebound in 2027, while warning that output would generally remain below levels projected before the war.

The outlook is uneven: oil exporters exposed to production and shipping disruptions face deeper damage, while oil-importing economies have shown greater resilience. The IMF’s baseline assumes the conflict eases in early 2027 and trade gradually returns to normal, but it identified a longer conflict and further energy interruptions as key risks. It also highlighted remittances, tourism, supportive financial conditions and policy responses as supports for demand in oil-importing economies.