IMF Says Middle East Growth Shows Strength but Risks Remain

Post by : Saif Nasser

The International Monetary Fund (IMF) has raised its growth forecast for the Middle East and North Africa (MENA) for 2025, but warned that risks to the region’s economy remain on the downside due to global uncertainty.

The IMF now expects the MENA region’s economy to grow by 3.3% in 2025, up from the 2.6% projected in May. This improvement comes as geopolitical tensions show some easing, global trade challenges continue, and oil and tourism sectors perform well.

Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, said the region has shown resilience despite high global uncertainty, trade tariffs, and ongoing geopolitical concerns. “The outlook this year reflected a resilience, despite elevated global uncertainty and trade challenges,” he said during a meeting in Dubai ahead of the IMF’s Regional Economic Outlook report.

Oil and Economic Reforms Help Growth

Countries that export oil have benefited from higher oil production, public investment, and efforts to diversify their economies. Meanwhile, oil-importing countries have seen growth supported by lower commodity prices, a recovery in tourism, and stronger remittances from citizens working abroad. Access to financial markets and moderating inflation have also helped.

Despite these positive signs, Azour warned that risks remain. These include possible drops in oil prices if global demand falls, rising global trade tensions, and high global inflation. “Geopolitical tensions have improved in the last few weeks, but countries need to stay vigilant,” he added.

Egypt Leads Growth in the Region

Egypt’s growth forecast for 2025 has been revised up to 4.3%, from 3.8% in May. This is due to increased tourism revenue, strong remittances from Egyptians abroad, and falling inflation. Inflation in Egypt has dropped from nearly 40% in 2023 to 11.7% in September 2025, supported by an IMF bailout program of $8 billion in March 2024.

Azour encouraged Egypt to continue reforms, especially the sale of state-owned enterprises and improving clarity in public finances. IMF discussions with Egypt on its loan program’s combined fifth and sixth review are ongoing and expected to conclude in the fourth quarter.

IMF Support Across the Region

Since 2020, the IMF has approved $55.7 billion in financing for countries in the MENA region. Of this, $21.4 billion has been approved since early 2024 for programs in Egypt, Jordan, Morocco, and Pakistan. These programs aim to stabilize economies, reduce inflation, and support long-term growth.