The Middle East and North Africa region faces mounting economic pressures due to declining oil revenues, increased global trade tensions, and reduced international aid, the International Monetary Fund (IMF) said in its latest regional outlook.

Brent crude prices soared above $120 a barrel in 2022 and are projected to stabilise between $65 and $69 per barrel through 2026. The IMF cautioned that such levels leave energy-exporting economies across the region increasingly exposed to global market volatility.

“Tariff plans from major economies, along with geopolitical tensions, are creating significant uncertainty that could shave between 2% and 4.5% off regional growth,” said Jihad Azour, IMF Director for the Middle East and Central Asia, during a briefing in Dubai.

Reductions in foreign aid, particularly from the United States, are further compounding regional challenges. President Donald Trump’s shift away from large-scale aid contributions has created new risks, especially for fragile states.

Despite these headwinds, the IMF projects regional growth of 2.6% this year, up from 1.8% in 2024. Gulf economies continue to benefit from rising foreign direct investment—up nearly 2% of GDP since the pandemic—though other MENA nations have seen weaker inflows.

Azour noted the IMF’s ongoing engagement with Lebanon and openness to assist Syria’s economic recovery, a process he said will require institutional reform and broad international support.

Structural reforms and greater diversification remain key to building resilience, the IMF concluded.