IMF slashes Mideast outlook by nearly 3 points as Iran war hits economies
The International Monetary Fund cut gross domestic product forecasts for the Middle East and North Africa, with the fallout from the conflict exposing stark divergences between the region’s energy exporters and importers.
The blow from the US-Israeli war with Iran will tip several Middle East economies into recession in 2026 as new forecasts indicate the region will suffer far more than its global counterparts.
On Tuesday, the International Monetary Fund slashed gross domestic product forecasts for the Middle East and North Africa, with the fallout from the conflict exposing stark divergences between the region’s energy exporters and importers. In its latest World Economic Outlook, the IMF cut MENA’s real GDP forecast to just 1.1% in 2026, down from a January forecast of 3.9% and last year’s 3.2%. Growth is projected to rebound to 4.8% in 2027, assuming energy flows normalize in the coming months.
Meanwhile, global GDP is now expected to slow to 3.1% in 2026, while emerging markets are forecast to grow 3.9%. These revisions come as the conflict — now in a brittle ceasefire phase — continues to disrupt shipping through the Strait of Hormuz and threaten long-term global economic fallout, with the US moving to impose a blockade on Iranian oil exports.
Details: The IMF’s latest forecasts underscore that exposure to Hormuz is now the single biggest differentiator across regional economies.
