By Eshioromeh Sebastian
The International Monetary Fund (IMF) has warned that the ongoing war in the Middle East is disrupting energy production, trade routes and shipping, raising food and energy prices and increasing economic uncertainty across the region.
In its October 2026 Regional Economic Outlook for the Middle East and Central Asia, titled Steering Through Uncertainty: Strengthening Resilience in Challenging Times, the Fund said the economic consequences of the conflict were uneven, with directly affected oil-exporting countries facing the greatest challenges.
The report noted, however, that adaptation by businesses and households, resilient financial markets, government policy support and the rerouting of supplies had helped contain the impact of the disruptions.
It said the ability of economies to withstand the shock varied considerably, depending on their exposure to the conflict, economic structures and policy frameworks.
The IMF examined the implications of the crisis for economic growth, inflation, fiscal and external balances, as well as broader macroeconomic stability.
On inflation, the report highlighted how global supply disruptions could generate stronger and more persistent price increases in some countries than others, depending on the effectiveness of their economic policies and structural characteristics. It stressed the importance of strengthening policy frameworks to limit the transmission of external supply shocks into domestic prices.
The Fund also identified trade diversification as a critical strategy for improving economic resilience, noting that countries with diversified products, trading partners, transport options and shipping routes were better positioned to withstand external disruptions.
The report’s third chapter examined how trade diversification could support economic growth and resilience across the Middle East, North Africa, Afghanistan and Pakistan (MENAP), as well as the Caucasus and Central Asia (CCA).
The IMF recommended that governments rebuild fiscal and external buffers, strengthen economic policy frameworks and expand trade diversification to prepare for future shocks. It also urged countries to position their economies to benefit from emerging opportunities in artificial intelligence.
The assessment comes amid heightened geopolitical uncertainty, with the Fund emphasising the need for countries to strengthen their capacity to absorb external shocks while maintaining long-term economic growth.
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