Oil exporters to contract in 2026, then rebound strongly in 2027

The International Monetary Fund expects the economies of oil-exporting countries directly affected by the energy and trade disruptions caused by the war in the Middle East to contract notably in 2026. It sees them rebounding strongly in 2027 as production and trade gradually return to normal. Jihad Azour, Director of the IMF's Middle East and Central Asia Department, spoke at a press conference during the IMF and World Bank annual meetings in Bangkok. He said higher oil prices provide some support to these countries' fiscal and external positions. However, output levels will remain below the medium-term estimates made before the war. The IMF forecasts that the economies of the Middle East, North Africa and Pakistan will contract by 1.3% this year, after growing 3.3% in 2025, and then grow 6.6% in 2027. Azour noted that these projections mask wide differences across the region. Oil-importing countries have kept their activity resilient, supported by remittances, tourism revenue, easier financial conditions and government measures. Inflation in these economies is expected to rise moderately this year before gradually easing.