Economic activity in the Middle East, North Africa (MENA), and Pakistan has surpassed earlier expectations, prompting the International Monetary Fund (IMF) to raise its growth projections for the region.
In its latest Regional Economic Outlook, the IMF forecast 3.2% growth in 2025 for the MENA region and 3.7% in 2026, both higher than earlier estimates in April. The Fund said the upward revision reflects a stronger recovery across oil exporters and importers alike, including Pakistan.
Jihad Azour, IMF Director for the Middle East and Central Asia, said the region’s economic activity has been “stronger than expected.” He noted that oil exporters have benefited from higher production after the unwinding of OPEC+ cuts, while oil importers and Pakistan gained from lower energy prices, robust remittance inflows, and a thriving tourism sector that has fueled domestic demand.
Inflation in most MENA economies and Pakistan remains moderate, helped by easing food and energy prices and tight monetary policies. However, inflationary pressures have risen in several Central Asian countries due to strong demand and supply constraints.
The IMF projected Pakistan’s growth to reach 3.6% in 2026, supported by continued reforms, improved financial conditions, and greater investor confidence. The Fund, however, warned that severe flooding in late 2025 could pose additional risks to growth, inflation, and external balances.
Azour emphasised that the overall outlook for the region remains positive yet cautious, with domestic demand and structural reforms expected to sustain momentum despite global uncertainties.
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