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2mo ago

IMF Raises 2025 MENA Growth Forecast as Pakistan Flood Risks Loom

Stronger oil output, tourism and remittances prompted the upgrade across the region.

Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), is reflected in glass as he attends the IMF/World Bank 2025 Annual Meetings in Washington, D.C., U.S., October 17, 2025. REUTERS/Ken Cedeno
An organic market in Beirut. The IMF says Lebanon's ceasefire with Israel 'offers hope' for a spell of reconstruction, which would be a boon for its economy. EPA
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Overview

  • The IMF now expects the Middle East and North Africa to grow about 3.3% in 2025, up from its May projection of 2.6%.
  • Oil exporters are benefiting from higher production as OPEC+ unwinds voluntary cuts, with Saudi Arabia and the UAE among the main contributors to the regional pickup.
  • Pakistan’s growth is projected at 3.6% in FY2026, with the Fund cautioning that severe third-quarter floods could further weaken growth, raise inflation and widen the current account deficit.
  • Pakistan’s inflation is projected to rise again in 2026 as short‑term electricity subsidies end and tariffs normalize, despite a notable deceleration this year.
  • Financial conditions have improved as sovereign spreads narrowed and market access returned for several issuers, though the IMF says risks remain tilted to the downside from softer global demand, trade frictions and tighter financing.