The International Monetary Fund (IMF) said on Thursday that a prolonged war in the Middle East and further disruptions to energy production, shipping routes, or critical infrastructure pose the biggest risk to regional and global economies.

Additional takeaways

Biggest risk is prolonged conflict. 

Middle East war causes highly uneven economic shock across region, severe strain on directly affected states. 

Pre-war surpluses, alternative paths and demand shifts helped mitigate oil output shock, but cushions are limited. 

IMF urges countries to rebuild buffers, prioritize price stability, tighter monetary policies and prudent fiscal measures. 

Inventories are lower, spare capacity tighter, fresh disruption could trigger bigger price shifts. 

Predicts 1.3% shrinkage in Middle East, North Africa and Pakistan area in 2026 vs 3.3% expansion in 2025. 

Oil exporters hit by war to face sharp contraction in 2026, rebound in 2027, but output stays below pre-war forecasts. 

Robust but uneven recovery forecast in Middle East, North Africa and Pakistan region by 2027, growth to reach 6.6%.