MENA and Pakistan Economies Surpass Growth Forecasts
Economic growth in the Middle East, North Africa (MENA), and Pakistan has outperformed expectations in 2025, according to the International Monetary Fund’s (IMF) latest regional economic outlook. The report, released on Tuesday, forecasts growth of 3.2% in 2025 and 3.7% in 2026, marking upward revisions from previous estimates.
Jihad Azour, the IMF’s Director for the Middle East and Central Asia, attributed this stronger performance to multiple factors. Oil-exporting nations benefited from increased production following the relaxation of OPEC+ output cuts, while oil-importing economies and Pakistan gained from lower energy prices, steady remittances, and a rebound in tourism, all of which boosted domestic demand.
The IMF noted that inflation trends vary across the region. In most MENA economies and Pakistan, inflation is easing, aided by stable food and fuel prices and tighter monetary policies. However, in some Central Asian countries, price pressures remain high due to robust demand.
For Pakistan, the IMF projects growth to reach 3.6% in 2026, supported by ongoing reforms and improving financial stability. The report acknowledged that inflation in Pakistan has significantly declined this year but may rise again in 2026 as temporary subsidies are phased out and energy prices normalize.
Despite the overall optimism, the IMF warned of potential risks, including the lingering impact of severe floods in Pakistan during the third quarter of 2025, which could affect growth, inflation, and external balances.
Overall, the IMF maintained a cautiously positive outlook, emphasizing that continued reform efforts and strong domestic demand will remain key to sustaining momentum in MENA and Pakistan through 2026.