IMF Raises Growth Outlook for MENA Region Despite Global Economic Shocks

The International Monetary Fund (IMF) has upgraded its growth forecast for the Middle East and North Africa (MENA) region, projecting 3.3% growth in 2025 and 3.7% in 2026, despite continued global and geopolitical challenges.

Jihad Azour, IMF Director for the Middle East and Central Asia, said in an interview with AFP that the region’s resilience has been notable in the face of multiple economic shocks.

“Despite all the shocks we saw to trade with the tariff measures, geopolitical tension, the conflicts, the volatility in oil price, we see that growth has been performing better than last year,” Azour said.

According to the IMF’s latest regional report, presented on Tuesday in Dubai, the revised forecasts represent an increase of 0.7 and 0.3 percentage points, respectively, from its May projections. The region recorded 2.1% GDP growth in 2024.

Azour noted that Gulf countries benefited from higher oil production volumes, which offset price declines, while other nations saw economic improvements driven by tourism, industrial activity, and agriculture.

He added that despite the war in Gaza, the region has withstood significant geopolitical shocks over the past two years, including pressures on neighbouring countries such as Jordan and Egypt.

“The current ceasefire in Gaza is an important and welcome development,” Azour said, though he cautioned that it remains too early to determine its long-term economic implications.

The IMF official emphasised that the region’s outlook will depend on how stability translates into lower risk profiles and progress in post-conflict reconstruction efforts in Syria, Lebanon, Gaza, and the West Bank.

He said the immediate priority is to assess damage and reconstruction needs in Gaza, with coordination from the United Nations and the World Bank, while warning that Yemen and Sudan will face immense financing challenges amid falling international aid.