IMF cuts Middle East and North Africa GDP growth forecast to 2.6% in 2025 vs October view of 4%

IMF cuts Middle East and North Africa GDP growth forecast to 2.6% in 2025 vs October view of 4%

The International Monetary Fund (IMF) has revised its economic outlook for the Middle East and North Africa (MENA) region, reducing the projected GDP growth rate for 2025 to 2.6%. This downward revision is a significant change from the October 2024 forecast, which had projected growth at 4% [1].

The new outlook reflects the challenges posed by global economic uncertainty, trade tensions, and geopolitical risks. The IMF's Director of the Middle East and Central Asia Department, Jihad Azour, highlighted that the region faces ongoing conflicts, political instability, and climate vulnerability, which are compounding the effects of global economic headwinds [1].

Azour noted that while the direct effects of recently announced U.S. tariffs on MENA economies are expected to be modest, the indirect effects could be more pronounced. Slower global growth will weaken external demand and remittances, while tighter financial conditions may challenge countries with elevated public debts. Oil exporting economies could also see fiscal and external positions deteriorate due to lower oil prices [1].

The IMF's revised forecast for MENA growth in 2025 is 2.6%, down from the previous projection of 4%. This downward revision reflects weaker global growth and more modest effects of the drivers that were expected to boost regional growth, such as oil output recovery, conflict stabilization, and structural reform progress [1].

Despite the challenges, the IMF remains optimistic about the long-term growth prospects of the region. Azour emphasized that MENA economies should prioritize managing short-term instability and advancing structural reforms to reduce vulnerabilities and seize opportunities arising from the evolving global trade and financial landscape [1].

Investors and financial professionals should closely monitor the developments in the MENA region, as the revised economic outlook may impact investment decisions and regional economic stability. The IMF's recommendations for policy responses, including structural reforms and strategic trade and investment corridors, will be crucial in shaping the region's economic future [1].

References:
[1] https://www.imf.org/en/News/Articles/2025/04/24/tr-04242025-mcd-press-briefing-sms-2025