ISLAMABAD: The International Monetary Fund (IMF) has warned that ongoing conflicts in Sudan, Gaza, Lebanon, Syria, and Yemen are inflicting significant harm on the global economy, with severe consequences for regional stability and growth.
In its latest Regional Economic Outlook for the Middle East and Central Asia, the IMF highlighted a sharp decline in projected growth for non-GCC oil-exporting nations in 2025. The report attributed this downturn largely to the economic devastation caused by protracted wars and civil unrest across these conflict zones.
The humanitarian toll is staggering: more than 4 million people have been displaced in Sudan alone due to civil war, while over 50,000 people have been killed in Gaza and 4,300 in Lebanon. Syria’s economy has contracted by 60%, and Lebanon continues to face sky-high inflation and mounting financial instability.
The IMF also noted that the ripple effects of regional conflicts are impacting relatively more stable economies. Egypt and Jordan, though not directly involved in the fighting, are experiencing economic pressures as a result of regional spillover.
Despite the bleak regional outlook, the report pointed to signs of recovery in Pakistan, citing a rebound in agricultural output following devastating floods. Growth among Middle Eastern oil-importing nations is projected to reach 3.4% in 2025.
To address fiscal imbalances, Pakistan has raised its interest rate by 550 basis points.
Nevertheless, public financing needs across Pakistan and other MENA countries are expected to reach a combined $263 billion in 2025, underlining the urgent demand for external support and economic reforms.
