Regional Economic Outlook for the Middle East and Central Asia, October 2025
Regional Economic Outlook, October 2025
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- Published: October 21, 2025
Regional overview and headline finding
- Economic performance in the Middle East and Central Asia has shown resilience so far in 2025, despite still-elevated global uncertainty and continued regional geopolitical tensions.
- Growth in Middle East and North Africa is projected to strengthen gradually, supported by oil output, strong demand, and reforms.
- Growth in the Caucasus and Central Asia is expected to slow to a more sustainable pace.
- Risks that could weigh on the outlook include weaker global demand, tighter financial conditions, renewed geopolitical instability, and climate shocks.
- Policy implication: fiscal prudence, structural reforms, and stronger policy frameworks are essential to sustaining durable growth.
Regional developments and outlook (Chapter 1)
- Economic growth in the Middle East and North Africa (MENA), Pakistan, and the Caucasus and Central Asia (CCA) has remained strong in 2025 despite global uncertainty, trade disruptions, and regional geopolitical tensions.
- MENA oil exporters benefited from higher production.
- MENA oil importers and Pakistan benefited from lower energy prices, strong remittances, healthy tourism inflows, and improving agricultural conditions.
- CCA growth exceeded expectations, supported by solid domestic demand, credit expansion, and hydrocarbon exports.
- Looking ahead:
- GDP growth in MENA and Pakistan is projected to strengthen gradually.
- CCA growth is expected to slow to a more sustainable pace.
- Risks reiterated: weaker global demand, tighter financial conditions, renewed geopolitical tensions, and climate shocks—emphasizing the need for fiscal prudence and structural reforms.
Boosting economic recovery after conflict (Chapter 2)
- Core finding: Economic recovery from conflict requires more than peace—it demands comprehensive policies that restore macroeconomic stability, rebuild institutions, and secure resources for reconstruction.
- Three priorities identified from statistical analyses and case studies of post-conflict recoveries in the Middle East and North Africa and Caucasus and Central Asia regions:
- Swift macroeconomic stabilization.
- Access to financing.
- Stronger institutions and governance.
- Evidence on outcomes:
- Countries that stabilized inflation and growth quickly, secured external resources, and improved institutional quality achieved more durable recoveries.
- Case-study lessons:
- Donor engagement works best when well-coordinated.
- Timely structural reforms matter.
- Political commitment to rebuilding state capacity is critical.
- Technical assistance from international partners helps strengthen policymaking and resilience.
Policy recommendations and priorities
- Maintain fiscal prudence to anchor stability amid external and regional risks.
- Pursue structural reforms to support durable growth and to transition from temporary demand-supporting factors.
- Strengthen policy frameworks and institutional capacity to manage shocks and support reconstruction where relevant.
- For post-conflict settings:
- Prioritize swift macroeconomic stabilization.
- Secure access to adequate financing for reconstruction.
- Invest in institutional strengthening and governance reforms.
- Coordinate donor engagement and leverage technical assistance.
Regional Economic Outlook for the Middle East and Central Asia, October 2025 (IMF).
Content in this bundle
- Chapter 1
- Chapter 2
- Chapter 2 Annex
- Executive Summary
- October 2025 Reo Jihad Azour Dubai Press Remarks
- Media Brief: Caucasus and Central Asia
- Media Brief: Middle East and North Africa and Pakistan
- Statistical Appendix
- Full Report
- CHAPTER 1 GLOBAL PROSPECTS AND POLICIES
- CHAPTER 2 THE GREAT TIGHTENING: INSIGHTS FROM THE RECENT INFLATION EPISODE