IMF warns of 2026 economic slump amid regional trade disruptions
The International Monetary Fund warns that regional conflict will disrupt energy and trade, leading to a temporary economic downturn before a projected recovery in 2027.
The IMF expects a 1.3% contraction across Pakistan, the Middle East, and North Africa in 2026.
Economic disruptions are primarily driven by conflict affecting energy production, shipping, and tourism.
A sharp recovery of 6.6% growth is projected for 2027 as regional tensions are assumed to ease.
Oil-importing countries like Pakistan have shown more resilience than oil exporters due to domestic demand.