IMF lowers growth forecasts for MENA economies

The International Monetary Fund (IMF) significantly lowered its expectations for economic growth in the Middle East and North Africa, citing varying fallout from the Iran war on the region’s countries, which extends beyond energy supplies.

The MENA region is expected to record a much slower expansion this year with real GDP growth now forecast at 1.1%, which is 2.8 percentage points lower than the pre-Middle East tensions projection of 3.9%, before seeing a recovery in 2027, the IMF said in its Regional Outlook Report released on Thursday.

Energy disruptions due to the Iran war will weigh heavily on Gulf oil and gas exporters' economies, while the Middle East's oil importers like Egypt and Jordan face shocks from higher commodity prices and possible falls in income from remittances from Gulf-based workers, it added.

“The conflict affected the non-oil sector, where the countries in the GCC have a strategic global position, especially in terms of airlines and logistics”, Jihad Azour, the IMF's director for the Middle East and Central Asia, told Reuters.