Saudi Arabia Faces Economic Contraction as War Woes Mount
The fund said heavily indebted oil importers should target subsidies and rebuild fiscal buffers as energy prices rise and debt distress deepens.
- 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.
72 Articles
72 Articles
The Monetary Fund cautions against the continuation of the war and the disruption of energy and shipping. The economies of the Middle East, North Africa and Pakistan are expected to contract 1.3 per cent in 2026, growing 6.6 per cent in 2027, with the erosion of stocks and increasing risks of higher prices.
(Cairo=Yonhap News) Correspondent Kim Sang-hoon = In the aftermath of the Middle East war that began in Iran and spread to Saudi Arabia and Yemen, the region produced oil...
The 'biggest' risk to Asia’s economies isn’t over yet, IMF warns
The IMF has warned that a prolonged Middle East war and renewed disruptions to energy production, shipping routes and critical infrastructure pose the biggest risks to economies across the Middle East and Central Asia. With energy buffers thinning, the lender expects a sharp regional contraction in 2026, followed by an uneven recovery in 2027.
IMF warns prolonged Middle East war threatens regional economies
Prolonged war in the Middle East and further disruptions to energy production, shipping routes or critical infrastructure pose the biggest risk to economies in the Middle East and Central Asia, the International Monetary Fund said on Thursday. Jihad Azour, the IMF’s director for the Middle East and Central Asia, told reporters the war was imposing […]
IMF Warns Prolonged Middle East War Could Deepen Economic Crisis Across Region
The International Monetary Fund (IMF) has warned that a prolonged war in the Middle East and renewed disruptions to energy supplies, shipping routes and critical infrastructure pose the biggest risks to regional economies, as governments face mounting pressure from higher costs and economic uncertainty. Jihad Azour, the IMF’s director for the Middle East and Central […]
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