The International Monetary Fund confirmed that the Middle East, North Africa and Pakistan region is going through a decisive and difficult stage in its modern economic history, due to the war that began in February 2026. The Fund explained that this conflict was not just a border crisis, but rather turned into a disaster that shook the heart of vital economic corridors, leading to a global energy crisis and disruption of supply chains.
In the face of these challenges, the Saudi economy emerged as an example of resilience, as it demonstrated “exceptional resilience” that enabled it to overcome the effects of the closure of the Strait of Hormuz and the decline in regional production. This is due to the foundations of “Vision 2030”, which strengthened strong financial policies and the logistical ability to adapt to the most difficult geopolitical changes.
During a presentation of the “Regional Economic Outlook Report” update in Washington, on the sidelines of the spring meetings of the International Monetary Fund and the World Bank, the Director of the Middle East and Central Asia Department at the International Monetary Fund, Dr. Jihad Azour, described the current war as reshaping the map of regional growth at rates that the markets have not witnessed in decades. He pointed out that the cessation of navigation in the Strait of Hormuz led to the disruption of the flow of 21 million barrels of oil per day, which raised Brent crude prices to more than $100.
The impact was not limited to oil only, but also extended to natural gas supplies, as its prices in Europe rose by 40 percent, exceeding the record levels recorded during the Ukraine crisis in 2022, which threatened global energy security.
He explained that the energy disturbances resulting from the Iranian war will severely affect the economies of the Gulf oil and gas exporting countries, while the oil importing countries in the Middle East, such as Egypt and Jordan, will face shocks from the rise in basic commodity prices and the possibility of a decline in the income of remittances from workers in the Gulf countries.
Overall, the Middle East and North Africa region is expected to witness a significant slowdown in growth this year, with real GDP growth expected to reach 1.1 percent, 2.8 percentage points below pre-war expectations, before improving in 2027, according to the latest regional outlook report issued by the International Monetary Fund.
“It is not just an oil and gas story,” Azour said. “It is also the impact of this war on all the other products that are produced in the region, and in which the region has a strategic location,” including fertilizer exports and many chemical and other specialty products that make it a global strategic economic corridor. He warned that rising food costs directly threaten vulnerable groups in the Middle East, Africa and Asia, especially with vital Gulf exports being affected. The countries of the region provide 40 percent of sulfur exports and 20 percent of nitrogen fertilizers globally. He pointed out that any long-term disruption in these supplies would mean a direct threat to global agricultural seasons and the purchasing power of millions of people.
He added: “Moreover, the conflict has affected the non-oil sector, as the Gulf Cooperation Council countries enjoy a global strategic position, especially in the field of aviation and logistics services.”
The International Monetary Fund indicated that some oil-importing countries in the region depend heavily on the Gulf economies for energy imports and financial flows, which makes them vulnerable if the war intensifies or is prolonged.
Azour stressed that one of the most important, harsh and inspiring lessons that the global economy has learned from the war and the closure of the Strait of Hormuz lies in the necessity of “diversifying trade routes” as a basic guarantee for the continued flow of goods and energy.
In this context, Azour considered that the approach followed by Saudi Arabia within its strategic vision was not just an infrastructure development, but rather a comprehensive redesign of the logistical transit map. He pointed out that the Kingdom has succeeded, by developing alternative ports on the Red Sea and expanding land and railway networks, in reducing the traditional state of “fragility” resulting from reliance on a single, narrow waterway.
Azour said that the economic reforms implemented by Egypt and their strengthening of safety margins enable the country to better deal with external shocks.
He added: “They allowed the exchange rate to be more flexible, to absorb any external shock, and they also increased and built a high level of reserves, allowing them to provide more reassurance to the market.”
The report showed great variation in the ability to absorb shocks. While Qatar faced a significant drop in growth expectations of 15 percentage points as a result of damage to its gas infrastructure, the Sultanate of Oman showed resilience thanks to its geographical location. At the same time, financing pressures on Egypt, Pakistan, and Jordan increased as a result of the rise in sovereign differences, which prompted Azour to confirm the Fund’s readiness to provide technical and financial support to meet the requirements of the next stage.
Azour said: “If we witness a recovery in oil production, and a complete opening of the Strait of Hormuz, this will mean that countries will increase their production very quickly. The level of oil prices, which is expected to remain high compared to pre-2026 levels, will enable oil-producing countries to recover some of the gains they are currently suffering due to the crisis.”
