Saudi Arabia Faces Economic Contraction as War Woes Mount
The fund said many vulnerable countries must target subsidies and rebuild fiscal buffers as war-driven energy prices and debt pressures rise.
- On Tuesday, the International Monetary Fund warned that low-income developing countries face an energy shock from the Iran war and have "no choice" but to cut spending or face debt restructuring.
- The ongoing US-Iran conflict has sent energy prices soaring as Tehran's retaliatory action targeted Washington's Gulf allies, curtailing oil supplies and bleeding into fertiliser and other sectors.
- Oil-Importing nations lacking exposure to the artificial intelligence boom are most vulnerable, Koeva Brooks noted, as consumption baskets heavily weighted toward energy and food make adjustments "much much more difficult."
- Conversely, the IMF raised its 2026 global growth forecast to 2.1 per cent, with advanced economies in AI supply chains like Taiwan and South Korea posting significantly higher figures.
- Intense El Nino activity in the Pacific raises climate risks that have already pushed up prices for rice and beverages, compounding pressure on vulnerable regions already strained by energy and debt crises.
52 Articles
52 Articles
In its latest World Economic Outlook report, the International Monetary Fund (IMF) raised its forecast for the average global oil price this year and 2027 by 7.2 percent and 11 percent, respectively, compared to the July WEO. The adjustment is even more drastic compared to April: +16.4 and +15 percent, respectively. According to the organization, the average oil price may only decrease by about 8.7 percent next year.
War in the Middle East is deepening global inequality, IMF says
War in the Middle East is deepening global inequality, IMF says Submitted by MEE staff on Tue, 10/13/2026 - 11:50 International Monetary Fund also points to destabilising impact of AI, as economic leaders meet in Bangkok Children pose for a photo in a makeshift camp for people displaced by clashes between Iran-aligned Houthi fighters and Saudi-backed Yemeni government forces, near Aden, Yemen, 7 October 2026 (Reuters) Off Wars across the Midd…
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