KEY POINTS
- IMF says MENA and Pakistan’s economies grew faster than expected in 2025
- Regional growth forecast raised to 3.2% this year, 3.7% in 2026
- Inflation seen easing on lower food and energy prices
- IMF cautions risks remain tilted to the downside amid global headwinds
ISLAMABAD: The International Monetary Fund (IMF) has said that economies across the Middle East and North Africa (MENA) region — including Pakistan — have performed better than anticipated in 2025, driven by easing inflation, resilient domestic demand, and improving remittance inflows.
According to the IMF’s latest Regional Economic Outlook for the Middle East and Central Asia, released on Monday, regional growth is projected to reach 3.2 percent in 2025, up from 2.1 percent in 2024, before accelerating further to 3.7 percent in 2026.
The Fund said the rebound reflects “stronger-than-expected activity across both oil exporters and importers,” naming Pakistan among the key beneficiaries of easing global commodity prices and fiscal discipline.
“Growth in MENA and Pakistan has exceeded earlier expectations, supported by steady remittance inflows, improved fiscal positions, and recovery in tourism,” the Fund stated in its briefing, adding that Pakistan’s macroeconomic stabilization program is beginning to yield results despite recent flooding and external pressures.
Oil-exporting economies, the IMF noted, benefited from a gradual unwinding of OPEC+ production cuts, while oil-importing countries — including Pakistan, Egypt, and Morocco — gained from lower energy import bills and recovering private consumption.
At the same time, regional inflation is projected to remain moderate in the wake of declining food and energy prices with tighter monetary policy.
“Inflation has been easing across much of the region, with headline rates now back within target ranges in several economies,” the Fund’s Middle East and Central Asia Department observed.
NEW: The IMF projects growth in the MENA region and Pakistan at 3.2% in 2025, with a gradual strengthening supported by higher oil output, resilient domestic demand, and ongoing reforms.
See our latest Regional Economic Outlook: https://t.co/Kv4ACUvVnK pic.twitter.com/caZeynW3RL
— IMF Middle East & North Africa (@IMFinMENA) October 21, 2025
However, the IMF warned that risks to the outlook remain “tilted to the downside.” The Fund cited ongoing geopolitical tensions, volatile oil markets, climate-related shocks, and tighter global financial conditions as potential threats to sustained growth.
The report also emphasised the need for continued fiscal consolidation and structural reforms in countries such as Pakistan to strengthen resilience.
“Reforms that enhance revenue mobilization, governance, and climate adaptation remain critical to safeguarding recent gains,” it said.
The IMF urged policymakers across MENA and Pakistan to “use the current momentum to rebuild buffers and advance reforms that promote inclusive and sustainable growth.”
