IMF Middle East and Central Asia Department Director: After Eight Months of Gulf Conflict, Regional Resilience Was Earned
Jihad Azour, Director of the International Monetary Fund's Middle East and Central Asia Department, wrote after the IMF-World Bank Annual Meetings in Bangkok that eight months into the Gulf conflict, MENA region output is projected to contract by 1.3%, but there is a severe divergence between Gulf oil-exporting nations and importers such as Egypt, Jordan, and Morocco. He argues that resilience stems from policy buffers accumulated before the conflict, not luck; if the conflict persists and buffers are exhausted, today's delayed effects could become larger adjustments tomorrow.
At the IMF-World Bank Annual Meetings in Bangkok in October 2026, a recurring question was: How is the Middle East and North Africa economy still operating eight months after the Gulf conflict? Is this resilience or luck? The answer from Jihad Azour, Director of the International Monetary Fund's Middle East and Central Asia Department, is: Resilience is earned, not luck.
Hostilities erupted in the Gulf at the end of February this year, triggering the largest oil and energy shock in history. At the time, many feared the regional economies would be crushed—shipping lanes closed, energy prices soared, and vulnerable economies struggled to survive. Eight months later, the worst expectations have not materialized. Activity in some economies has slowed significantly, but there has been no collapse; output in many economies continues to expand.
However, the IMF's latest Regional Economic Outlook has lowered its 2026 MENA output forecast to a contraction of 1.3%, 2.7 percentage points lower than the April forecast. This headline figure masks huge differences among more than 20 countries within the region.
Several Gulf economies face deep contractions this year due to disruptions in energy production and trade. The IMF expects a strong rebound in 2027, provided the conflict subsides and trade gradually normalizes. But the rebound will not erase losses: Gulf output is projected to remain below pre-conflict expectations in the medium term.