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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, while growth in the Caucasus and Central Asia is expected to slow to a more sustainable pace. But risks loom: weaker global demand, tighter financial conditions, renewed geopolitical instability, and climate shocks could all weigh on the outlook. This makes fiscal prudence, structural reforms, and stronger policy frameworks essential to sustaining durable growth. The REO also explores post-conflict economic recovery, showing that lasting peace requires swift macroeconomic stability, adequate financing, and stronger institutions to rebuild state capacity.

More publications in this series: Regional Economic Outlook