Description

This Regional Economic Outlook update covers the economic effects of the war in the Middle East on the Middle East, North Africa, Afghanistan, and Pakistan (MENAP), as well as spillovers to the Caucasus and Central Asia (CCA). The report documents how disruptions to energy production and exports, along with impacts on air traffic, logistics, and financial markets, affect economies in the region. The outlook remains highly uncertain and depends on the duration and intensity of the war. In MENAP, prolonged hostilities would sustain elevated energy prices, deepening trade disruptions, further compressing confidence, and eroding the limited fiscal space available to policymakers in the region. In the CCA, spillovers from the war place risks to the outlook firmly to the downside, reflecting the region's exposure to commodity price volatility as well as trade and tourism disruptions. Mitigating the impact of the shock requires disciplined yet agile policy responses that are discussed in the report.

More publications in this series: Regional Economic Outlook