The International Monetary Fund (IMF) has warned that the Middle East, North Africa and Pakistan will experience a 1.3% contraction in economic output in 2026 due to the ongoing war against Iran. The forecast comes as US troops and diplomats are being evacuated from Middle East posts amid reports that President Donald Trump is considering major strikes against Iran.
The IMF attributed the economic decline to disruptions in energy production, shipping, tourism, trade and confidence. The war’s impact has led to a sharp drop in regional output, with the agency warning that further energy production issues could worsen the outlook. The agency also noted that economic growth is expected to rebound to 6.6 percent in 2027.
The situation follows growing tensions between the US and Iran, with Trump denying ongoing negotiations with Iran and stating the situation will resolve “fairly soon.” The evacuation of US personnel from the region has raised concerns about the potential for escalation. The IMF’s forecast highlights the economic risks associated with the conflict, underscoring the broader implications for the region’s stability and development.
