Eco
The International Monetary Fund (IMF) has projected a 1.3% contraction in the gross domestic product of the Middle East and North Africa region in 2026, attributing this decline to the oil shock and its adverse effects on the regional economy. The IMF report highlights that this economic downturn coincides with ongoing disruptions in global supply chains, stemming from the US conflict with Iran and its repercussions on the global economy. The report further notes that if the conflict in the region subsides and trade flows return to normal, economic growth could rebound to 6.6% in 2027, supported by recovery in oil-exporting Gulf countries. It emphasizes that the war has caused a significant shock to regional economies, with varied impacts among countries. Oil-exporting nations directly affected by the conflict have experienced disruptions in energy production and exports, whereas many oil-importing countries have shown relative resilience due to domestic demand, remittances from abroad, tourism, and policy support. The report also points out that rising food and energy prices, shipping disruptions, and increased uncertainty have led to severe economic consequences and heightened inflationary pressures in the region. It adds that businesses, households, and governments have adapted by rerouting supply chains, drawing from inventories, providing subsidies, and implementing other policy measures that have helped mitigate the economic fallout. In October, the IMF forecasted global growth to remain steady at 3.1% in 2026, boosted by advancements in artificial intelligence, despite the ongoing oil shock. Global markets continue to experience volatility due to the US-Israeli conflict with Iran, contributing to higher oil prices and inflation levels, alongside a slowdown in economic growth. The decline in purchasing power caused by rising fuel prices has also sparked protests in several European countries, including France, Italy, and Belgium.
