IMF Projects 1.3% Economic Contraction in Middle East and North Africa for 2026

The International Monetary Fund forecasts a 1.3% economic contraction across the Middle East, North Africa, Afghanistan, and Pakistan in 2026. This downward revision is attributed to the economic impact of the U.S.-Israeli conflict with Iran, disrupting energy, shipping, trade, and tourism. A recovery is possible in 2027 if the conflict eases and trade normalizes.

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