# IMF sees 1.3% contraction for Middle East, North Africa and Pakistan region in 2026, then 6.6% growth

Source: Searchable (https://searchable.pk/news/economy/imf-sees-13percent-contraction-for-middle-east-north-africa-and-pakistan-region)
Type: News article
Author: Searchable Editorial
Published: 22 Oct 2026
Updated: 22 Oct 2026
Retrieved: 25 Oct 2026

> The Iran war has hit oil exporters hardest, the IMF says, while importers like Pakistan have held up on remittances. The risk is another energy shock.

The **International Monetary Fund** expects economic output in the region it calls **MENAP (the Middle East, North Africa and Pakistan)** to **shrink by 1.3% in 2026** because of the US-Israeli war on Iran, before bouncing back with **6.6% growth in 2027**. The forecast is in the IMF's regional economic outlook released in Dubai on Thursday, Reuters reported.

## What the IMF said

- The war has hurt **energy production, shipping, tourism, trade and confidence** across the region.
- The damage is **uneven**. Oil exporters, whose production and shipping were disrupted directly, were hit hardest.
- **Oil importers have been more resilient**, helped by remittances and tourism, easier financial conditions and quick government steps to shield consumers from higher prices.
- Even after the 2027 rebound, output in most of these economies is expected to **stay below the levels forecast before the war**.
- The IMF's main case assumes the conflict **eases in early 2027** and trade slowly returns to normal, but it calls the uncertainty "exceptionally high".

## What it means for Pakistan

Pakistan is an oil importer, the group the IMF describes as holding up better, and remittances from workers in Saudi Arabia, the UAE and the UK are a large part of why. The other side of that is exposure: the IMF names **further disruption to energy production and trade routes** as the main risk, and Pakistan pays for that at the pump. PSO's ex-depot price in Karachi was **Rs 379.31 a litre** on 22 October; follow it on our [petrol price page](/data/petrol-price).

The Fund also warned that **global financial conditions could tighten** if investors cool on AI-driven productivity gains or interest rates rise on inflation and debt worries. For Pakistan that would make borrowing abroad dearer and could pressure the rupee. Check the [dollar rate today](/data/usd-pkr) and [SBP's policy rate](/data/sbp-policy-rate).

The IMF repeated its advice from last week's annual meetings: keep prices stable, keep budgets sustainable, protect central bank independence and push reforms that raise productivity and create jobs.

## Other regions

The IMF expects the **Caucasus and Central Asia** to grow **5.2% in 2026 and 5% in 2027**, slowing to what it calls a more sustainable pace.

The regional report groups Pakistan with the Middle East and North Africa; Pakistan's own country forecast is published separately in the IMF's World Economic Outlook and programme reviews.

## Frequently asked questions

**What is the IMF's 2026 forecast for the Middle East, North Africa and Pakistan?**

In its regional outlook of 22 October 2026 the IMF forecasts a 1.3% contraction in 2026 and 6.6% growth in 2027 for the MENAP region.

## Sources

- IMF sees 1.3% contraction in Middle East, North Africa and Pakistan in 2026 (Reuters) (Reuters via Business Recorder): https://www.brecorder.com/news/40445426/imf-sees-13-contraction-in-middle-east-north-africa-and-pakistan-in-2026

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