Regional Economic Outlook Update, Middle East and Central Asia, April 2026: War in the Middle East: Economic Spillovers and Policy Challenges

Author: International Monetary Fund. Middle East and Central Asia Dept.

The April 2026 IMF Regional Economic Outlook Update examines how the war in the Middle East is reshaping growth, inflation, and financial conditions across the region and discusses key priorities for regional policymakers.

Publication date: July 2026

ISBN: 9798229041621

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Topics covered in this book

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Exports and Imports , Inflation , Economics- Macroeconomics , Urban and Regional , MENA Regional Economic Outlook , War in the Middle East economic impact , Strait of Hormuz disruption , MENA growth and inflation , GCC economies energy shock , IMF April 2026 MCD REO , Regional economic resilience , oil price , MENAP economy , headline inflation , inflation expectation , monetary policy support , MENAP oil , price volatility , commodity price , food price , Oil , Inflation , Oil prices , Oil exports , Middle East , Middle East and Central Asia , Global , Central Asia , North Africa , Asia and Pacific

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Summary

This Regional Economic Outlook update covers the economic effects of the war in the Middle East on the Middle East, North Africa, Afghanistan, and Pakistan (MENAP), as well as spillovers to the Caucasus and Central Asia (CCA). The report documents how disruptions to energy production and exports, along with impacts on air traffic, logistics, and financial markets, affect economies in the region. The outlook remains highly uncertain and depends on the duration and intensity of the war. In MENAP, prolonged hostilities would sustain elevated energy prices, deepening trade disruptions, further compressing confidence, and eroding the limited fiscal space available to policymakers in the region. In the CCA, spillovers from the war place risks to the outlook firmly to the downside, reflecting the region’s exposure to commodity price volatility as well as trade and tourism disruptions. Mitigating the impact of the shock requires disciplined yet agile policy responses that are discussed in the report.